The FBI and federal prosecutors are reportedly closing in on the AIG executive whose suspect investments cost the insurance giant hundreds of billions of dollars. The government is investigating whether or not 54-year old Brooklyn-native Joseph Cassano committed criminal fraud in virtually bankrupting the company.
"He almost single-handedly is responsible for bringing AIG down and by reference the economy of this country," said Rep. Jackie Speier (D-Ca.)
Cassano, who lives in London, made more than $300 million running the infamous Financial Products Division of AIG where he, with about a dozen others, committed AIG to insure what turned out to be more than a trillion dollars worth of junk quality loans held by banks.
"He is the golden boy of the casino," said Rep. Speier. "They basically took peoples' hard earned money and threw it away, gambled it and lost everything. And he must be held accountable for the fraud, for the dereliction of his duty, and for the havoc that he's wrought on America."
When approached by ABC News outside of his London home Cassano said he did not want to talk about the allegations against him.
After the huge losses became known, Cassano was fired from AIG in early 2008, but he still received a salary of $1 million a month until Congress intervened. AIG has received about a $180 billion in bailout funds so far.
"AIG was insuring junk and it was the AIG insurance that made the junk marketable," said tax law expert Jack Blum. "American taxpayers have been put on the hook for this insurance junk."
Even as the bad loans began to emerge, Cassano boasted to Wall Street analysts that his transactions, called credit default swaps, were foolproof.
"It is hard for us, and without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions," he said on an AIG investor conference call in August 2007.
Yet, according to Blum, many others saw the writing on the wall.
"This stuff was absolutely toxic and most of the people who were dealing in it knew how toxic it was," said Blum.
An ABC News investigation found that Cassano set up some dozens of separate companies, some off-shore, to handle the transactions, effectively keeping them off the books of AIG and out of sight of regulators in the U.S. and the United Kingdom.
"This is the other very important issue underneath the AIG scandal," said Blum. "All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion."
And nobody in the United Kingdom was monitoring AIG's actions either, according to a member of Parliament there.
"There was a culture that was called light touch regulation," MP Vince Cable told ABC News, "which meant that these activities could go on and nobody kept a close eye on it."
Even Cassano's bosses at AIG seem to have been in the dark, ignoring warnings from the AIG accountant assigned to Cassano, Joseph St. Denis.
St. Denis says Cassano told him he was kept away from the books because Cassano was concerned St. Denis "would pollute the process."