Shariah Finance, Criminal Wrongdoing in the AIG Takeover: Will the Special Inspector General for the TARP Funds Investigate the Illegal Trust?

Yesterday we broke the story of possible criminal wrongdoing in regards to the bailout of AIG by Treasury Secretary Tim Geithner, then Director of the New York Federal Reserve, and Federal Reserve Chairman Ben Bernanke.

It appears that, through it’s 77.9% control of AIG’s equity and voting rights, the NYFed “sought to accomplish an illegal financial transaction through false means” by creating an “independent”: trust that was in fact not independent, placing it “in violation of federal anti-money laundering statutes (18 USC § 1956).” Here we elaborate a bit further, laying out the issue in the text of a letter submitted to Neil Barofsky, Special Inspector General for TARP (SIGTARP)– as the government takeover of AIG was accomplished using funds provided to the Troubled Asset Relief Program.

First, however, some context: Crucially, these facts were discovered while securities litigator David Yerushalmi and the Thomas More Law Center was representing Iraq War vet Kevin Murray in Murray vs. Geithner, et al. Mr. Murray is rightfully horrified that the very doctrines of the enemy he faced in combat would be promoted by the US government. Specifically, prior to the U.S. government’s takeover of the insurance giant AIG, the company was the world’s leading promoter of Shariah-compliant finance products and businesses. Bailing out and forcefully (and illegally) taking ownership of AIG put the American taxpayer in the position of advocating Shariah-compliant finance, which is troubling on many levels:

(more…)