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Understanding the Defendants’ Takeover of AIG In support of Plaintiff’s Motion to Compel Defendant Geithner’s Deposition Testimony © Law Offices of David.

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Presentation on theme: "Understanding the Defendants’ Takeover of AIG In support of Plaintiff’s Motion to Compel Defendant Geithner’s Deposition Testimony © Law Offices of David."— Presentation transcript:

1 Understanding the Defendants’ Takeover of AIG In support of Plaintiff’s Motion to Compel Defendant Geithner’s Deposition Testimony © Law Offices of David Yerushalmi, P.C. All rights reserved.

2 Fiduciary Duty to U.S. tax payers! While it made no sense to “fix” AIG’s debt- driven crisis by giving it $85 BN of more debt, the Credit Facility up to this part of the structure was typical and made at least structural sense. But the Fed and the FRBNY wanted more than a debt deal; they wanted absolute control over AIG and needed to come up with a way to take almost 80% of AIG’s equity and voting rights. So they decided to use $40 BN of the Credit Facility as “Placeholder” funds to accomplish through the artifice of the AIG Trust what they could not do legally... A second problem with the Trust: Q: Was it proper for the FRBNY to name a bank account—the U.S. Treasury—as a beneficiary when it cannot own anything? A: No; the Trust is invalid on its face! Geithner, FRBNY, Fed, and Treasury Dept: “The FRBNY created a truly independent Trust with non- governmental Trustees to take legal title to 77.9% of AIG’s shares to avoid illegalities and any conflicts-of- interest.” And that is why the Treasury Department’s deponent testified that the real beneficiary is the Treasury Department and why everyone agrees that the ultimate beneficiary is the U.S. tax payer. But how is the Trust and its Trustees “independent” of the U.S. Government when § 1.03 of the Trust Agreement gives the Fed absolute and unfettered control over the Trust’s existence and its terms??? § 13(3) Fed. Res. Act AIG $$$ SCF 1 SCF 2 SCF 3 SCF 4 Credit Rating Agencies Debt-driven credit rating downgrade FED Federal Reserve Bank of New York (President Geithner) $85 BN Debt Credit Facility AIG $$ Principal + Interest Payments Collateral: ≈ 100% of AIG Assets via Stock Pledges/Liens Transfer of Legal Interest in 77.9% of AIG Equity + Voting U.S. Treasury Fiduciary Duty to a bank account? Absolute FED Control: § 1.03 Trust Agreement U.S. Department of the Treasury (Sec. Geithner) (Rule 30(b)(6) Deponent) $40 billion TARP credited to AIG Trustee A Trustee B Trustee C AIG Credit Facility Trust And this leaves the final tranche of the disguised “Placeholder” structure where the “US. Tax Payer”, at the hands of the Treasury Dept., sends $40 BN to the FRBNY as a credit to AIG, which is in reality “payment” for the 77.9% of AIG received through the Credit Facility and Trust structure. Transfer of Beneficial Interest in 77.9% of AIG Equity + Voting HOW THE U.S. GOVERNMENT TOOK OVER AIG--SUPPORTING AND FUNDING ITS SHARIAH-C0MPLIANT INSURANCE BUSINESS--THROUGH WHAT IS ARGUABLY AN ILLEGAL ARTIFICE AIG in crisis runs to Geithner at FRBNY Geithner runs to the FED The FED calls upon the “unusual and exigent circumstances” of FRA to permit non-member bank AIG to borrow FED funds from FRBNY

3 § 13(3) Fed. Res. Act AIG $$$ SCF 1 SCF 2 SCF 3 SCF 4 Credit Rating Agencies Debt-driven credit rating downgrade $40 BN Portion of Debt Credit Facility Transfer of 77.9% Interest in AIG Equity + Voting FED Federal Reserve Bank of New York (President Geithner) U.S. Department of the Treasury $40 billion TARP credited to AIG $40 billion TARP paid to FRBNY but credited to AIG And now we’ll see the same illegal Placeholder transaction but without the artifice of the “independent” Trust... Now we eliminate the $40 BN “Placeholder” funds provided by the FRBNY Credit Facility and the bottom line deal with the true flow of the real deal’s “consideration” comes into plain view...

4 Understanding the Defendants’ Takeover of AIG § Laundering of monetary instruments (3) Whoever, with the intent— (A) to promote the carrying on of specified unlawful activity; (B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or (C) to avoid a transaction reporting requirement under State or Federal law, conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section. © Law Offices of David Yerushalmi, P.C. All rights reserved. Under § 1956(c)(7)(D), “specified unlawful activity” is defined as a violation of § 1005.

5 Understanding the Defendants’ Takeover of AIG § Bank entries, reports and transactions Whoever makes any false entry in any book, report, or statement of such bank [FED member bank], company, branch, agency, or organization with intent to injure or defraud such bank, company, branch, agency, or organization, or any other company, body politic or corporate, or any individual person, or to deceive any officer of such bank, company, branch, agency, or organization, or the Comptroller of the Currency, or the Federal Deposit Insurance Corporation, or any agent or examiner appointed to examine the affairs of such bank, company, branch, agency, or organization, or the Board of Governors of the Federal Reserve System; © Law Offices of David Yerushalmi, P.C. All rights reserved. This “any other company” is AIG, which was forced by the FRBNY and the FED to give up 80% of its equity/voting rights when it was illegal for the FRBNY to even hold equity.

6 Understanding the Defendants’ Takeover of AIG § Laundering of monetary instruments (3) Whoever, with the intent— (A) to promote the carrying on of specified unlawful activity; (B) to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity; or (C) to avoid a transaction reporting requirement under State or Federal law, conducts or attempts to conduct a financial transaction involving property represented to be the proceeds of specified unlawful activity, or property used to conduct or facilitate specified unlawful activity, shall be fined under this title or imprisoned for not more than 20 years, or both. For purposes of this paragraph and paragraph (2), the term “represented” means any representation made by a law enforcement officer or by another person at the direction of, or with the approval of, a Federal official authorized to investigate or prosecute violations of this section. © Law Offices of David Yerushalmi, P.C. All rights reserved.

7 Transfer of Legal Interest in 77.9% of AIG Equity + Voting Fiduciary Duty to U.S. tax payers! § 13(3) Fed. Res. Act AIG $$$ SCF 1 SCF 2 SCF 3 SCF 4 Credit Rating Agencies Debt-driven credit rating downgrade FED Federal Reserve Bank of New York (President Geithner) $85 BN Debt Credit Facility AIG $$ Principal + Interest Payments Collateral: ≈ 100% of AIG Assets via Stock Pledges/Liens U.S. Treasury Fiduciary Duty to a bank account? Absolute FED Control: § 1.03 Trust Agreement U.S. Department of the Treasury (Sec. Geithner) (Rule 30(b)(6) Deponent) $40 billion TARP credited to AIG Trustee A Trustee B Trustee C AIG Credit Facility Trust Transfer of Beneficial Interest in 77.9% of AIG Equity + Voting AIG in crisis runs to Geithner at FRBNY Geithner runs to the FED The FED calls upon the “unusual and exigent circumstances” of FRA to permit non-member bank AIG to borrow FED funds from FRBNY It is at this point, that this Placeholder artifice becomes a money laundering scheme in violation of Title 18 § 1956 of the federal criminal code. How? Because the FRBNY and the FED want absolute control of AIG (meaning its equity and voting rights), but neither they nor the Treas. Dept. have any legal authority, to do so. The taking of 77.9% of AIG is the “specified unlawful activity” and the Trust is the fraud to accomplish it. This emergency action was perfectly legal and understandable. The Credit Facility was also perfectly legal, albeit stupid. Giving debt to a company drowning in debt simply makes no sense unless it was a necessary step to accomplish that which the FED could not accomplish directly.


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