U S Dept of Justice, David Farmer, Trustee vs. Harmon

NEW DISCOVERY (04-17-09): More evidence of fraud, bad faith, racketeering, money-laundering, undisclosed conflicts of interests, etc. between numerous entities and witnesses involved in this case:

April 17, 2009

AIG Hawaii sold to Farmers

State's 3rd-largest automobile insurer will change names
when deal is done in summer

BY GREG WILES, Advertiser Staff Writer

AIG Hawaii, the state's third-largest automobile insurer, is being sold as part of a $1.9 billion deal as owner American International Group Inc. takes steps to repay some of the billions owed in government bailout money.

The deal announced yesterday involves Los Angeles-based Farmers Group Inc. buying AIG's auto insurance unit, a move that will expand Farmers into Hawai'i for the first time.

Yesterday Farmers Chief Executive Officer Robert Woudstra said that Farmers had no immediate plans to make any changes to AIG Hawaii's 310-person staff or operations.

"It's a good fit," Woudstra said from his Los Angeles office, explaining Farmers does not have any business in the state currently.

He said, however, the AIG Hawaii name will disappear.

"I can't tell you right now what we're going to call it, but the AIG name will have to go away."

AIG Hawaii had been contemplating a name change on its own given the stigma of being associated with its parent company, which had severe financial problems and needed a Federal Reserve-led rescue to avoid collapse last year.

In October, AIG put its auto group on the market as it looked for ways to pay off some of the bailout, which now totals about $182.5 billion.

AIG Hawaii President and Chief Executive Officer Robin Campaniano yesterday called the sale a positive development for the local unit. In 2008 AIG Hawaii's premiums written fell to about $100 million, about $18 million less than a year earlier.

Campaniano said some of the decline may have been due to clients departing because of the parent company's problems. A downturn in the Hawai'i economy contributed also.

"We're delighted that this is happening," said Campaniano.

"We're hopeful and very optimistic that the strength of Zurich and Farmers will greatly add to the presence we have in Hawai'i."

Farmers is owned by Zurich Financial Services Group, a Swiss company that serves customers in 170 countries and has business customers in Hawai'i.

AIG Hawaii insures about 100,000 cars in Hawai'i, along with offering homeowners, life, commercial and other insurance. Only Geico and State Farm insure more cars in the state.

Woudstra said he became familiar with the Hawai'i operations in examining AIG's business and that "it has performed exceedingly well for AIG."

"The only product that they write that we don't is flood (insurance)."

He said he had gotten good reports about Campaniano, with people saying nothing but positive things about his reputation.

The AIG automobile business was operated under a unit known as 21st Century Insurance Group, which owned AIG Hawaii as well as running operations in 28 other states. The sale will require the approval of state insurance commissioners.

Yesterday Hawai'i Insurance Commissioner J.P. Schmidt said he would closely look at the deal because of the role AIG Hawaii plays in the state.

"Farmers and Zurich are both good, solid companies, so that's a good thing," Schmidt said. "But we'll be looking at the details and specifics to ensure that the people of Hawai'i are taken care of in the best possible manner.”

The sale may be completed this summer. Schmidt said he and other insurance commissioners had been working on a uniform application process so that the sale approval can be processed efficiently.

http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=2009904170352

# # #

Catbird Note: More pages related to “good, solid companies,” Farmers and Zurich:

http://www.insurance.ca.gov/0400-news/0100-press-releases/0060-2007/nr091-2007.cfm

http://www.farmersinsurancegroupsucks.com/farmers_insurance_lawsuits.htm

~ ~ ~

U.S. 9th Circuit Court of Appeals

TRUSTEE v HAYES

IN RE: BISHOP, BALDWIN, REWALD,

DILLINGHAM & WONG, INC., a

Hawaii corporation, Debtor. No. 95-16119

OFFICE OF THE U.S. TRUSTEE, 83-00381-MP

Appellant,

THOMAS HAYES,

Appellee.

IN RE: BISHOP, BALDWIN, REWALD, DILLINGHAM & WONG, INC.,
a Hawaii corporation, Debtor.

No. 95-16776

OFFICE OF THE U.S. TRUSTEE, Appellant

THOMAS HAYES; REYNALDO D. GRAULTY, Trustee,

Chapter 7 Trustee; HONOLULU PROFESSIONAL

SERVICES; BANKRUPTCY TRUSTEE,

Appellees.

Appeals from the United States District Court for the District of Hawaii Martin Pence, District Judge, Presiding

Argued and Submitted November 4, 1996--Honolulu, Hawaii

Filed January 13, 1997

Before: J. Clifford Wallace, Mary M. Schroeder, and Arthur A. Alarcon, Circuit Judges.

Per Curiam Opinion

COUNSEL

Kathleen Dunivin Schmitt, United States Department of Justice, Executive Office for United States Trustees, Washington, D.C., for the appellant.

James F. Evers, Wagner, Watson & Pettit, Honolulu, Hawaii, for appellees Graulty, as trustee, and Wagner, Watson & Pettit.

Stanley E. Levin, Davis & Levin, Honolulu, Hawaii, for appellee Graulty, individually.

Louise K.Y. Ing, Alston, Hunt, Floyd & Ing, Honolulu, Hawaii, for appellees Thomas Hayes and Honolulu Professional Services.

OPINION

PER CURIAM:

The United States Trustee (U.S. Trustee) appeals from the district court's order overruling the objection to Reynaldo Graulty's final report as trustee for the Bishop Estate (Estate). The district court had jurisdiction under 28 U.S.C.S 157(d). We have jurisdiction over this timely appeal pursuant to 28 U.S.C. S 1291, and we vacate the district court's order and remand this case for 56 days for clarification.

During 1990-1992, Graulty was trustee for the Estate. Mary Louise Scheulin, as an employee of the Estate, oversaw its day-to-day operations during that time and incurred both salary and rent expenses. Scheulin was hired by the Estate's administrative controller, Thomas Hayes, whom Graulty hired with the district court's approval. Over the U.S. Trustee's objection, the district court, on May 26, 1995, approved Graulty's final report for the Estate. In that report, the Estate, and not Graulty, was responsible for Scheulin's expenses. The U.S. Trustee again objected that the workload of the Estate did not justify Scheulin's employment, and argued that someone else -- presumably Graulty -- should be responsible for Scheulin's expenses. The district court once more overruled the U.S. Trustee's objection on July 14, 1995 ....

Since we remand the case solely due to the failure of Graulty to prepare the final report adequately and due to omissions in the draft order he presented to the court, the district court shall not require the Estate to compensate Graulty for any work arising from this remand.

VACATED AND REMANDED.

www.kycbs.net/Rewald-Trustee-vs-Hayes.htm

* * * * *

Disavow: A CIA Story of Betrayal

By Rodney Stich & T. Conan Russell

The Saga of
Ron Rewald and Bishop, Baldwin, Rewald & Wong

CAST OF CHARACTERS

http://www.namebase.org/sources/ZS.html

* * * * *

NEW UPDATE (09-07-08):

EARL I. ANZAI
Attorney General of Hawaii

DOROTHY D. SELLERS
HUGH R. JONES
Deputy Attorneys General
425 Queen Street
Honolulu, Hawaii 96813

Attorneys for the Beneficiaries

IN THE CIRCUIT COURT OF THE FIRST CIRCUIT

STATE OF HAWAII

In the Matter of the Estate

BERNICE P. BISHOP,

Deceased.

EQUITY NO. 2048 KSCC

~ ~ ~

REPORT OF ATTORNEY GENERAL CONCERNING MAY 7, 1999 ORDER

The May 7, 1999 order regarding orders to show cause requires the former trustees immediately to resign offices and directorships in the trust’s subsidiary and affiliated organizations... P&C Insurance Company, Inc., is a captive insurance company, the sole stock holder which is Pauahi Holdings Inc.

The Attorney General respectfully invites the court’s attention to the annual report publicly filed on March 28, 2000 by P&C (Ex. 1). The annual report lists Henry H. Peters as a director. The Attorney General is unable to determine whether the listing is incorrect; or whether Peters remains a director in violation of court order. The Attorney General’s several inquiries of the trust concerning this matter remain unanswered despite the passage of three months (Ex. 2).

DATED: Honolulu, Hawaii, May 5, 2000

Respectfully submitted,

<s> DOROTHY SELLERS
Deputy Attorney General

~ ~ ~

DECLARATION OF DOROTHY SELLERS

DOROTHY SELLERS hereby states:

1. I am a deputy attorney general, and I am familiar with the case records and files in Hawaii First Circuit Court Equity No. 2048 going back to approximately August 1997.

2. I have personal knowledge of the facts contained in this declaration and am competent to testify to them.

3. Exhibit 1 is a true and correct copy of the annual report of P&C Insurance Company for the year ending Dec. 31, 1999, filed in late March 2000.

4, Exhibit 2 is a true and correct letter of my February 15, 2000 letter to counsel for the trust asking for verification that Henry Peters had resigned from P&C and the effective date of the resignation. I have never received a response to that letter.

5. On March 13, 2000, deputy attorney general Hugh Jones wrote trustee Libkuman (with a copy to general counsel Colleen Wong) about a number of matters. The final two paragraphs of that letter are:

Finally, we also requested some time ago copies of Henry Peters’ letters of resignation from directorships and ex officio positions, and specifically from P&C Insurance Company. Although the resignation letters of the other trustees were filed with the Court, Peters’ were not.

Please respond to these requests before March 31, 2000. Thank you.

I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT.

DATED: Honolulu, Hawaii, May 5, 2000

www.kycbs.net/Doc-EQ2048-PC-Peters-5-5-0.pdf

www.kycbs.net/PC-Arms-Length-Guide-10-1-94.pdf

www.kycbs.net/Doc-EQ2048-Mediation-Order-3-9-0.pdf

www.kycbs.net/KSBE-INTERROGATORIES.htm

www.kycbs.net/RICO-In-Paradise.htm

* * * * *

Cayetano puppet Judge Rey Graulty:

“I’ll protect you, Jeremy”

Political cartoon by John Pritchett

http://www.pritchettcartoons.com/graulty2.htm

* * * * *

NEW DISCOVERY (07-08-08): E-mail regarding witness Judge Susan Oki Mollway:

Check out James B. Nicholson, Trustee vs. Harmon - Witness Judge Susan Oki Mollway

Tuesday, July 8, 2008 4:43 PM

From: Mutant Ninja Cats

Re:

James B. Nicholson, Trustee vs. Harmon - Witness Judge Susan Oki Mollway

FYI: Susan Oki, Echi Oki, Dan Mollway, Airline Industry, SEC, and the Broken Trust Asian Pacific Bamboo Legacy in collusion with AIPAC Political influence in the powerful influential Defense Appropriation Committee members {Ted Stevens and Duke Cunningham} under Hawaii U.S. Senator Daniel Inouye's leadership...... and the stealth Political, Economic, and Socialized intents for the pending AKAKA BILL in Congress, documented, again, under "A Confederacy of Dunces" {Forbes}.

Hey CB....this one is the ultimate "insiders" in Hawaii regulatory Government for the Broken Trust cabals linked to the Hawaii Legislature members including their own Federal Reps in Washington protecting their Hawaiian Hui "inside" investors from Southeast Asia to Wall Street:

I talked with the State Ethic's Commissioner / Director, Dan Mollway....Ms. Susan Oki's husband... about the BIG conflicts of interests involving our case against the State DLNR, The Ombudsman Office Director, The DCCA Rico "Investigations" with huge Political cover-ups involving the ANZAI's and the Hawaii Judicial system protecting their own regulatory local hui investors linked to the Bishop Estate Trustees.

Dan Mollway was involved with the "separate" Investigations involving the DLNR Bureau of Conveyance Public land records being ILLEGALLY manipulated and tampered for "Controlled Business" practices by the private sector {Title Guarantee Company employees with Realtors linked to Hoiku Consultant private computers being placed strategically in Public Office Government Buildings linked to the Hawaii Legislature members and the KSBE investments under Headmaster Colbert Matsumoto}.

He claimed that the State Ethics Department was still in the process of their own "separate" investigations {with vague public follow-ups since last year} while the State of Hawaii Attorney General's office conducted their own internal "investigations" in conjunction with a Third Investigations by the Hawaii Legislature members with their Union supported employees!

This again, is the same as a California PYRO MANIAC investigating his own blazing Wild Fire, while creating numerous distracted small fires around the BIG MAIN BON-FIRE, to attention away from his malicious and well calculated deeds!

The gas can {State of Hawaii DLNR Public Forgery Document Executive Order 3117 with a false Public misleading Official GAO Survey Map} with the match {The original suppressed DLNR Legal Access documents} and the remaining evidence with charred ruins {The Hawaiian Airline Pilot's family Bankruptcy proceedings implicating the KSBE and U.S. Trustees mishandling and suppressing the FRAUD} is all their for the "Investigators" conducted by the same Hawaii Buzzards and Vultures linked to the BROKEN TRUST Hawaii Legislature members, again, conducting their own Public Relation separate "investigations" for their Union memberships obtaining bribery gifts and favors {Oriental customs?}; The Hawaii State Ethics Director, linked to the Bamboo network Hawaii Judiciary system Huis with their own separate Public Relation damage control "investigations" to nowhere under the Hawaii AG's Office....promoting a Sovereign Hawaiian Bill, based on Illegal Political Constructive Fraud in Washington {1993 Simple Federal Apology Resolution to Hawaii by Senators Daniel Inouye and Akaka} while ignoring blatant Public Fraud and Political Corruption with OBSTRUCTION OF JUSTICE with HUGE CONFLICTS OF INTERESTS for: "SOCIAL EQUALITY AND POLITICAL JUSTICE FOR ALL" in Washington......

DOESN'T GET MUCH BETTER THAN THIS while Congress protects their own vested interests under the Political Department of Injustice cabals while helping spread American Democracy and American Values in the controversial Middle East and around the World!

Some interesting bit of side notes involving Ms. Susan Oki and her father....a former member of the famed 442 U.S. Military Regiment: My father, a former World War 11 Combat photographer in the South Pacific theatre, was married to a local Japanese during the War. He was a distant Political acquaintance and supporter for Jack Burns in Kailua, Oahu. They both belonged to the Kailua Lions Club and were both members of the private Lanikai Mid-Pacific Country Club....mostly all haole members after the War years.

My father was involved in a very fraudulent Hawaii land purchase and sale during the 1950s involving a corrupt Hawaii land surveyor and a fellow Irishman linked to the Hawaii Judges family members. After he relocated to San Francisco in the early 1960s, he retained a Hawaii attorney whom I believe was none other than Echi Oki.....from Honolulu, linked to the famed 442 Hawaii Military Brigade members whom he always supported due to the persecution of the local Hawaii Japanese community after Pearl Harbor.

Echi Oki, again, had close political links vis-a-vis their Military Service to Dan Inouye and their tight knit Hawaii 442 hui cabals.....prior and after the 1954 Hawaii Legislature Revolution. My father lost the Court case, despite the SELLER testifying in favor of my fathers allegations...... with huge conflicts of interests since the Judge was related to the Hawaii Judge {Taveras}.

Another side Note with the Airline Industry: I was personally involved with the earlier Bankruptcy proceedings with Frontier Airlines in Denver {1986} which later involved Drexel Burnham Wall Street investors linked to Frank Lorenzo and Carl Ichan in New York. Like Mr. Rodney Stich, the FAA investigator making allegations against United Airlines in Denver, I was singled out with several others for exposing blatant FAA rules and blatant Public Safety violations involving massive fraud and corruption benefiting short-cutting - Airline cost saving procedures...comprising massive Public Safety cover-ups and FAA regulatory with damage control omitted issues involving the new non-unionized, young and ignorant work force.

This all began with the across the board firings for the FAA Air Traffic Controllers soon after the Reagan - Bush Sr Tenure came into Office in 1981. The massive Airline De-regulations in Washington vis-a-vis Wall Stree profiteers, {i.e. - Michael Milken, Marc Rich, Ivan Boesky} during the roaring unregulated 1980s which became famous with the Movies: WALL STREET {Michael Douglas} and "BARBARIANS AT THE GATE".

AIPAC'S Norman Brownstein, based in Downtown Denver, vis-a-vis my former Brownstein political mole "girlfriend" , New York attorney Lisa Holstein, was responsible for helping Lorenzo with the Texas Continental Airline gang members to get out of their Prime gate and exclusive lounge commitments, including a faulty Automated Baggage system, involving more massive fraud and cover-ups at the new Denver International Airport were allowed to quietly relocate back to their Houston based "Texas Air Corp" headquarters.

In 1993, Clinton denied Frank Lorenzo, with his New York Attorney wife with Chase Manhattan Bank, as well as their Texas Air Corps - Colorado Resort land investors in Aspen & Vail {Phillip Winn Group}, to continue manipulating the SEC within the confines of the "insiders" under the lucrative "De-Regulated Airline Industry" mergers using Union Pension plans for lucrative leveraged acquisitions....compromising Public Safety and FAA violations with massive cover-ups in Washington.

Again, like former FAA investigator, Rodney Stich, doing his job, I became another Politcial liability, which is the former "inside" Dept of Justice / CIA lawyer, Norman Phillip Brownstein's expertise specialized job as Mr. Fix It at DIA; Protecting SEC Billionaire Fugitive's such as Marc Rich and HUD Director Phil Winn, while sheltering Drug Traffic cabals with Florida's Jack Devoe...for helping AIPAC's Political "cause" in Washington DC into vested SECURITY interests in the secular Middle East.....of course....always using OPM: The defrauded & obliviouos American Public Tax Payers left holding the bag on Wall Street to Main Street.

Brownstein's young, former single AIPAC New York mole attorney, Ms. Lisa Holstein, like others linked to AIPAC and David Steiner, as well as former CIA - U.S. federal prosecutor - Hawaii Public Safety Director, John Peyton, are reported deceased in New York and remote Africa?

The Rocky Mountain High - SILVERADO DNC Political Convention in Denver, Colorado, moving the Public cost over-run to a larger media exposure event with INVESCO Stadium {Bronco Pro Football Stadium...who are clients of NORM BROWNSTEIN, JACK HYATT, AND STEVE FARBER, now joined by former GOP Denver University CABALS - former Colorado RNC Chairman, Commercial Real Estate Investor and Resigned Department of Veterans Affair Director - James "De Oppressor Libre" Nicholson, linked to former Colorado RNC Chair, for convicted Swiss Ambassador - HUD Director - Phil Winn {DU Professor} with former DU Secretary of Interior Gale {CREA} Norton, as well as the latest new GOP University of Colorado connections to former U.S. Senator / UC President Hank Brown....involved in the "E Pluribus Unum" Wall Street article related to: THE 1993 Simple FEDERAL APOLOGY RESOLUTION TO HAWAII under Clinton with Political Constructive FRAUD and Public cover-up intents for the future Public subsidized AKAKA BILL in Congress....pending in Washington since 2000, after the U.S. Supreme Court decision over ruling the Hawaii Political Judicial system hidden under the Political Ninth District Circuit Court of Appeals, involving 'RICE V. CAYETANO' {Office of Hawaiian Affairs}.

Hope this "inside" information and insights can help you!

- little ninja cats with nonprofit coconut crab club

~ ~ ~

NEW DISCOVERY - 06/14/08: DAVID FARMER’S UNDISCLOSED RELATIONSHIPS WITH THE DIAMOND HEAD THEATRE, JAMES MacARTHUR, THE MacARTHUR FOUNDATION, GOLDMAN SACHS, ROBERT RUBIN, BILL CLINTON, HENRY PAULSON, THE NATURE CONSERVANCY, FAYE KURREN, HAUNANI APOLIONA, KAMEHAMEHA SCHOOLS, WALLY CHIN, HENRY PETERS, BISHOP MUSEUM, ADELE SMITH SIMMONS, BRAD HEPPNER, MARSH & McLENNAN, JAMES WRISTON, JUNE JONES, JOE MOORE, JAMES NICHOLSON, RON REWALD, JUDGE REY GRAULTY, ETC....:

www.jamesmacarthur.com/TwentiethCentury/TwentiethCentury.shtml

http://starbulletin.com/1999/04/14/news/story1.html

www.kycbs.net/Non-Profits.htm

www.kycbs.net/Bishop-Museum.htm

www.kycbs.net/ConnecticutConnection.htm

www.kycbs.net/MarshBirds.htm

www.kycbs.net/WCI.htm

~ ~ ~

October 2, 1996

Election Results From Hawaii's September 21 Primary

For the two weeks prior to the primary election, there was daily news coverage of the controversial marriage trial. Moreover, Deputy Attorney General Rick Eichor fed foolish, dangerous and unsubstantiated quotations to the press such as "incest is next", which was the evening home edition headline for the Honolulu Star-Bulletin on the Friday night before the Saturday primary election. [The Hawaii Supreme Court has already addressed the "incest, polygamy, and prostitution is next" fear in a footnote in their landmark 1993 ruling.]

Despite all that, the primary election was a draw. The leader of the anti-same-gender marriage forces in the Senate, Milton Holt, went down to resounding defeat at the hands of Suzanne Chun Oakland. Challenger Oakland, while in the House, had voted against the constitutional amendment which would have defined marriage as exclusively heterosexual.

On the other hand, the leader in the Senate for doing SOMETHING positive for gays and lesbians, Senator Rey Graulty, was also resoundingly defeated. Senator Graulty had taken a high profile stand in favor of domestic partnerships in the Senate, as a step toward legal recognition of same gender relations. He pushed through a Senate DP bill, 14 to 10, which then died in the House Judiciary Committee. For these, and other worthy causes, he was rejected by the voters. In Hawaii at least, the religious extremists are even more allergic to DP than they are to marriage ("it's just marriage by another name").

Rep. Billy Swain of Kauai was also defeated, by Mina Morita. Billy views homosexuality as equivalent to murder. Mina is more reasonable.

Two leaders, one on each side of the marriage issue, had close calls. Terrance Tom, Chair of the House Judiciary Committee and champion of the constitutional amendment to restrict marriage to heterosexuals, survived a primary challenge by only 54 votes. Senate President Norman Mizuguchi, ally of Rey Graulty, won by "only" 5 per cent.

The basic lesson seems to be that the enemies of same-gender marriage, organized as the Alliance for Traditional Marriage, is often impotent: many of the Senators that it targeted survived handily and their great champion Milton Holt was defeated.

http://members.tripod.com/~mphawaii/Updates/U961002.htm

~ ~ ~

January 7, 2008

Trial Opens for 5 Former
Insurance Execs

By JOHN CHRISTOFFERSEN, Forbes, AP

HARTFORD, Conn. - The former chairman and CEO of the world's largest insurer initiated a deal that led to five ex-executives being charged with participating in a scheme to manipulate the company's financial statements, a federal prosecutor said Monday during opening arguments at their trial.

Four former executives of Berkshire Hathaway (nyse: BRKA - news - people )'s General Re Corp. and a former executive of American International Group Inc. (nyse: AIG - news - people ) are charged in the scheme involving AIG's financial statements.

Prosecutor Raymond Patricco said former AIG CEO Maurice "Hank" Greenberg, who has not been charged in the case, started the scheme in 2000, after AIG's stock price dropped 6 percent, representing a loss of $12 billion to shareholders. The price dropped because loss reserves had declined.

"Greenberg and AIG came to Gen Re for this deal," Patricco said.

Attorneys for the defendants denied their clients did anything wrong Monday and said the case involved complex, subjective accounting. They attacked government witnesses - two senior Gen Re executives who pleaded guilty to conspiracy to falsify SEC filings - as out to save themselves.

They also said their clients did not benefit financially from the scheme.

"This is not Enron or WorldCom," said Anthony Pacheco, attorney for former General Re Senior Vice President Christopher P. Garand, referring to two of the biggest recent business scandals.

Greenberg, who headed New York-based AIG for nearly 40 years, has denied any wrongdoing. He was referred to as an unindicted coconspirator in an indictment.

Allegations of accounting irregularities, including the Gen Re transactions, led to his resignation in 2005.

At issue in the trial of the former executives are two reinsurance transactions between AIG and Stamford-based General Re. Reinsurance policies are backups purchased by insurance companies to completely or partly insure the risk they have assumed for their customers.

Prosecutors said the transactions were initiated by an AIG senior executive to quell criticism by analysts of a reduction in AIG's loss reserves in the third quarter of 2000. The indictment alleges that the aim was to make it appear that AIG increased its loss reserves by about $500 million in 2000 and 2001, pacifying the analysts and investors and artificially boosting the company's stock price.

"But the evidence in this case will show that deal was nothing more than a sham transaction," Patricco said. "The defendants in this case knew what appeared in the contracts was a lie."

Prosecutors said Greenberg called his friend, former General Re CEO Ronald Ferguson, who is one of the defendants, and told him that AIG wanted to increase its loss reserves by $500 million, but did not want to bear the risk.

Ferguson agreed to the deal Greenberg proposed, Patricco said.

For a reinsurance transaction to be legitimate, there must be a transfer of risk, which was lacking in the deal in question, prosecutors said.

"The evidence in this case will show the defendants knew this would be a no-risk deal for AIG," Patricco said.

Greenberg and the company later reported that the loss reserves had gone up.

"Plain and simple, ladies and gentlemen, the statements about AIG's loss reserves were lies," Patricco said.

In opening arguments, Patricco never mentioned billionaire investor Warren Buffett, who could play a role in the trial. Some of the executives say they believed Buffett was involved and supported the deal that led to the charges. Buffett leads Berkshire Hathaway.

But prosecutors say they only named Buffett, who has not been charged with any wrongdoing, as a potential witness to rebut any suggestion by the defense that he was involved in or approved the deal.

Michael Horowitz, Ferguson's attorney, said Monday that his client told Buffett and others about the requested transaction.

"Not a single red cent went into his pocket," Horowitz said.

The former General Re executives charged were Ferguson, chief executive officer from about 1987 through September 2001; Elizabeth Monrad, chief financial officer from June 2000 through July 2003; Robert Graham, a senior vice president and assistant general counsel from about 1986 through October 2005; and Garand, a senior vice president from 1994 until 2005.

Also charged was Christian Milton, AIG's vice president of reinsurance from about April 1982 until March 2005. Patricco said Monday that he lost $360,000 when the stock price dropped.

The defendants have pleaded not guilty to the charges.

AIG filed a restatement in 2005 related to the transactions and agreed to pay a record $1.64 billion in a settlement with federal and New York authorities.

In 2005, two senior Gen Re executives, John Houldsworth and Richard Napier, pleaded guilty to conspiracy to falsify SEC filings in connection with the investigation and are awaiting sentencing.

If convicted of all the charges, Ferguson, Monrad, Milton and Graham each face up to 230 years in prison and a fine of up to $46 million. Garand faces up to 160 years in prison and a fine of up to $29.5 million.

The trial is expected to last about two months.

The indictment:

www.usdoj.gov/usao/ct/Documents/FERGUSON_SS_Indictment.pdf

~ ~ ~

October 31, 2000

VIA Fax @ (202) 514-7021

Mr. Cliff Rones, Esq.

U. S. Department of Justice

Criminal Division, Fraud Section

P. O. Box 28188, McPherson Station

Washington, DC 20038

RE: Report of Fraud and Racketeering:

— P&C Insurance Company, Inc.

— Federal Insurance Company (Chubb Group)

— Marsh & McLennan, Inc.

— PricewaterhouseCoopers, LLP

— State of Hawaii, Insurance Division

Dear Mr. Rones:

I realize this is a quick follow-up to my letter of October 27, 2000, but an article in today’s Honolulu Star-Bulletin may help explain why the State of Hawaii, and especially the insurance commissioner, took no action on my complaints of fraud and racketeering regarding the subject insurance companies.

Under the front page headline of “Former trustees funneled donations to lawmakers,” reporter Rick Daysog writes:

Former trustees of the Kamehameha Schools operated an underground political network that funneled money to the campaigns of dozens of key Hawaii lawmakers, according to trust documents obtained by the Honolulu Star-Bulletin.

Between 1992 and 1997, the $6-billion estate’s now-defunct government relations department orchestrated contributions to incumbent Democrats friendly to the trust’s interests or to high-ranking politicians with regulatory control over the trust’s massive land and business holdings.

Those on the receiving end of estate contributions included U.S. Rep. Neil Abercrombie, Honolulu Mayor Jeremy Harris and former Mayor Frank Fasi’s Best Party. . . .

The state Campaign Spending Commission is looking into whether the trust illegally laundered contributions through former trustees, employees, relatives and outside contractors....

The list of recipients for that election year reads like a Who’s Who of island politics. They include:

. . . Former state Sen. Rey Graulty: On March 22, 1994, Wong bought $250 worth of tickets for a Graulty fund-raiser ... The check was delivered by a staffer. Graulty, now a state Circuit judge, could not be reached for response.

What the article does not say is that after Senator Graulty was defeated in his bid for re-election, he was appointed by Governor Ben Cayetano (D) as Hawaii’s Insurance Commissioner to replace Wayne Metcalf who was appointed to complete the term of another senator who passed away. Graulty was later appointed as a state judge, and Metcalf was re-appointed as the state insurance commissioner.

My complaint letters to both of these regulators received little or no response. To my knowledge, no disciplinary action was taken against any of these companies, and they have been allowed to continue the fraud and theft activities under the current interim-trustees and several top executives who served under the ex-trustees.

The Star-Bulletin article goes on to state:

. . . The ex-trustees deny that they took part in an organized effort to finance the campaigns of isle politicians. They say their political contributions and those of staffers and outside vendors were personal in nature and have nothing to do with trust business. . . .

However, in sworn testimony, some staffers say they not only helped organize the campaign contributions but also used trust facilities to direct the money to local politicians. . . .

I am one of the former staffers who testified under oath during the Attorney General’s investigation of the estate, about how staff were encouraged to assist certain politicians, including ex-trustee Henry Peters, Milton Holt and Robert Herkes.

The full Star-Bulletin articles can be retrieved from the internet at the following addresses:

http://starbulletin.com/2000/10/31/news/story1.html

and http://starbulletin.com/2000/10/31/news/story2.html

More details regarding my RICO lawsuit, and copies of my letters to the Hawaii and California insurance departments can be found at the following address:

www.the-catbird-seat.net/InsuranceCommissioners.htm

My mailing address and telephone number appear above if I can provide further information, or I can be reached by e-mail at:

bobbyharmon@hotmail.com

In our initial conversation, you indicated that you would probably be contacting the Federal Bureau of Investigation for further action. If this is still the case, then I would appreciate your relaying this information to the proper party.

Again, thank you very much for your assistance.

Very truly yours,

Bobby N. Harmon

~ ~ ~

Judge Rey Graulty is expected to testify regarding Defendant’s legal responsibilities with respect to his former position as president of Kamehameha Schools’ captive insurance company, P&C Insurance Company, Inc.

Judge Graulty is also expected to testify regarding Defendant’s various letters to him and others at the Hawaii Insurance Commissioner’s office, and whether this alleged “letter-writing campaign” constituted “harassment” and caused any undue financial harm to his former department.

Rey Graulty is also expected to provide information regarding his investigation into Defendant’s allegations against P&C Insurance Company, Federal Insurance Company, Marsh & McLennan, Aon Insurance Managers, and others, and what actions were taken as a result of these investigations.

Rey Graulty is also expected to testify regarding his business, financial, and social relationships with James Duca; Robert Kessner; Steven Guttman; Mark Bennett; Wayne Metcalf; Earl Anzai; Judge Kevin Chang; Judge David Ezra; Judge Eden Elizabeth Hifo (fka Bambi Weil); Judge Barry Kurren; Faye Kurren; Hawaii Dental Services; William S. Richardson; J.P. Schmidt; Francis W. “Bill” Reimers, Plan Compliance Group; Gilbert Tam; Robert Kihune; J. Douglas Ing; James Kawashima *; Gary Rodrigues; United Public Workers Union; Martin Luna *; David L. Fairbanks *; Pacific Group Medical Association (PGMA); Thomas Hayes; Ted Hong; Peter Carlisle; Clayton Hee; Sidney Ayabe; Henry Peters; Richard “Dickie” Wong; Yukio Takemoto; Alika Thompson; Jeremy Harris; Milton Holt; Joe Souki; Marshall Ige; Terrance Tom; Whitney Anderson; Donna Ikeda; Frank Fasi; Namlyn Snow; Myron “Pinky” Thompson; Bob Rosehill; Oswald Stender; Neil Abercrombie; Rodney Park; P&C Insurance Co.; Rocco Sansone; Marsh & McLennan; Investors Equity Life Insurance; Gary Vose; Honolulu Federal Savings & Loan (HonFed); Chubb Group; Aon; Royal SunAmerica; The Hartford; Colbert Matsumoto, Island Insurance Co.; John Waihee; George Ariyoshi; Benjamin Cayetano *; Robin Campaniano; AIG; Hawaiian Insurance & Guaranty Co.; Hawaiian Electric Co.; Zephyr Insurance Company; Nathan Aipa; Colleen Wong; Lyn Anzai; Louanne Kam; Dee Jay Mailer; Edwina Clarke; Clyde Mark; Bank of Hawaii; Linda Chu Takayama; Michael Heihre; Nam Snow; Paul Cathcart; Donald Clegg; Hawaii Land Use Commission; Colbert Matsumoto; Guido Giacometti; Susan Tius; Ronald Libkuman; Benjamin Matsubara; John Mullen & Co., Kirk Cashmere, James Nicholson, David Farmer, Norman Mizuguchi, and others to be named upon discovery..