Billionaire investor Warren Buffett, slated to be called as a prosecution witness in the criminal fraud trial against five executives for allegedly helping American International Group inflate its reserves, may also be called as a defense witness by at least one of the defendants, CNBC has learned.
The executive, Elizabeth Monrad, was the former chief financial officer of General Re, a subsidiary of Buffett's Berksire Hathaway , which engaged in the transaction that prosecutors say illegally transferred $500 million in reserves to AIG.
The transaction has attracted widespread regulatory attention, forcing AIG to restate earnings, pay $1.6 billion in fines and penalities, and causing the insurance giant to oust its former CEO Maurice "Hank" Greenberg, who was involved in the deal. Greenberg says he's done nothing wrong.
It also led to the indictment of the five executives, four from Gen Re and one from AIG.
Buffett's involvement in the transaction is less clear, though prosecutors believe he can shed light whether the five executives, including Monrad, committed accounting fraud.
But Reid Weingarten, an attorney for Monrad, has said that he believes Buffett's testimony could also his his client's case because he knew about the transaction, approved it and didn't stop it. Weingarten is now weighing whether to call Buffett as a witness to support Mornad's defense that she did nothing illegal.
Buffett didn't return a telephone call for comment. But Weingarten told CNBC: "I'm sorting through how I want to deal with this Buffett thing...but stay tuned, it's an interesting story."