AIG Faces U.S. Criminal Probe By Jonathan Stempel NEW YORK (Reuters) - The U.S. Justice Department has opened a criminal probe into whether American International Group Inc., the world's largest insurer by market value, helped a major banking client move bad loans off its books, AIG said on Wednesday. The insurer said it believes the investigation relates to a U.S. Securities and Exchange Commission probe into whether the company's AIG Financial Products Corp. unit helped PNC Financial Services Group Inc. cloak $762 million of bad loans, inflating the bank's profit by $155 million. New York-based AIG said the probes concern possible federal securities law violations. It said it intends to cooperate with the Justice Department and SEC, but believes that charges are unwarranted. AIG on Sept. 21 said SEC staff were considering whether to recommend civil charges in the matter. AIG spokesman Joe Norton declined further comment. Justice Department spokesman Bryan Sierra declined to comment. The case involves the creation for Pittsburgh-based PNC of so-called special-purpose entities, a type of partnership that Enron Corp. used to hide debt and which helped lead to the energy trader's collapse and bankruptcy. "The government seems to be saying AIG sold PNC on the idea of creating special-purpose entities for these bad loans," said Michael Nix, who helps invest $1.1 billion for Greenwood Capital Associates LLC in Greenwood, South Carolina, which owns about 350,000 AIG shares. "These weren't necessarily illegal, but you could say they were in a gray area. If there are other things going on we're not aware of, that's another story." Nix said that while "this isn't really new news," the Justice Department probe might hurt AIG's stock price, "and you might see a minimal financial impact to the company." AIG shares fell 1.4 percent to $67.57 in after-hours trading on INET following the announcement of the probe after the stock market closed. During the regular trading session on Wednesday, AIG shares rose 14 cents to $68.50 on the New York Stock Exchange. PNC in June 2003 agreed to pay $90 million to compensate shareholders and $25 million in penalties to settle Justice Department charges that its PNC ICLC Corp. unit fraudulently transferred loans and venture-capital investments off its balance sheet in the last three quarters of 2001. The bank is one of the 15 largest in the United States. AIG Financial Products helps create standard and customized interest rate, currency, equity and credit products. It also helps clients acquire U.S. and cross-border assets, and hedge interest rate and foreign exchange risk. (Additional reporting by Mark McSherry in New York and Jeremy Pelofsky in Washington) Quelle "AIG Faces U.S. Criminal Probe" : reuters.com Main page for "AIG Faces U.S. Criminal Probe"