Accounting & Tax

AIG Sues Former Accounting Exec

Insurance company says would-be whistleblower is full of hot air.
Stephen TaubDecember 26, 2006

American International Group sued a former accounting executive, alleging extortion and theft of company equipment and confidential information, according to the Associated Press.

The insurance company alleged the individual, Dong “Dee” Chung, a U.S. citizen who is believed to be living in Hong Kong, attempted to “harass, extort and injure” the insurer, according to the report.

According to the wire service, AIG filed a breach-of-contract claim against Chung in federal court in Manhattan, alleging she made allegations of accounting improprieties at the company after being fired earlier this month for “performance deficiencies and rank insubordination.”

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AIG also accused Chung of having a history of “harassing her former employers and lodging baseless allegations,” according to the wire service, adding that she worked for AIG for less than a year.

“AIG committed to investigate her allegations — which, AIG determined, related to issues that had previously been surfaced and shared with appropriate regulators — but refused her demand for a settlement,” the lawsuit says, according to the AP.

The lawsuit also reportedly stated that Chung responded with “what has become an escalating campaign of harassment and intimidation” that included sending privileged and confidential company legal memoranda to competitors and litigation adversaries and a “daily barrage of emails from numerous changing email aliases to AIG directors, officers and employees.”

According to the AP, the insurer also claims that Chung ignored AIG’s demand that she return a BlackBerry e-mail pager and two laptops that the company had issued to her.

A hearing is scheduled for Dec. 28, according to Reuters. Reuters also reported that U.S. Judge Jed Rakoff granted AIG a temporary restraining order calling for Chung to return any privileged, confidential or trade secret information to the company, as well as the computer equipment. The wire service also said the order bars her from disclosing AIG’s trade secrets until the hearing.

The AP, citing the lawsuit, noted that Chung joined AIG’s New York office in January as a vice president and assistant director for accounting policy in its Comptroller Division and was assigned to be the company’s Hong Kong designate in its Office of Accounting Policy in June.

According to the AP, AIG said Chung was “unwilling to cooperate with others at AIG or take direction” from her superiors after she was hired and received a verbal warning in July that her performance was deficient. The company also reportedly claims she ignored a request to meet with her new supervisor in November and did not report to the office for an 11-day period in late November, even though her request for leave was not approved by her supervisor.

The AP also noted that the complaint accused Chung of harassing her former employer, KPMG LLP, in a prior lawsuit and was sanctioned by an appellate court in Chicago.

It noted that in an order in June 2004, the 7th Circuit Court of Appeals reprimanded Chung for “abuse of the court system through frivolous and vexatious litigation.”

“Any further such abuse will result in the imposition against her of a bar to further access to the federal courts, except in criminal cases and applications for writs of habeas corpus,” the appeals court also found, according to the report.