AIG Wins Dismissal of Whistle-Blowers’ False Claims Suit

American International Group Inc. (AIG) won dismissal of a whistle-blower lawsuit by a California couple who claimed the insurer defrauded the U.S. government by making false claims to secure its federal bailout in 2008.

U.S. District Judge Gonzalo Curiel in San Diego in an April 19 ruling dismissed the False Claims Act complaint by Derek and Nancy Casady because their allegations were based on publicly disclosed information and because they failed to provide enough factual information about AIG’s alleged scheme to support their fraud claims.

“After detailing facts regarding the government issued loans to AIG, and AIG’s history leading up to the loans, the Casadys merely allege that these actions ‘constitute fraud,’” the judge said. They “fail to provide any facts that these statements were actually false or that the government’s reliance on the false statements resulted in the subsequent loans.”

The U.S. government in 2011 declined to participate in the lawsuit. Curiel allowed the Casadys to file a second amended complaint to address the deficiencies.

James Mahon, a lawyer for the Casadys, didn’t immediately return a call to his office after regular business hours seeking comment on the ruling.

The case is U.S. ex rel Derek Casady v. American International Group Inc., 10-00431, U.S. District Court, Southern District of California (San Diego).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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