Michael Murphy, the former Bermuda-based legal counsel for American International Group Inc., may not face criminal charges after being implicated, but not named in a May civil suit filed by New York Attorney General Eliot Spitzer against AIG and its former chief executive and chairman Maurice (Hank) Greenberg.

The fact that Spitzer was unlikely to pursue criminal charges against Murphy emerged yesterday morning in a New York Times report.

Darren Dopp, a spokesman for Mr. Spitzer, did not return requests on Monday or yesterday, for information on whether or not charges could be laid against Mr. Murphy.

Mr. Dopp did tell Reuters yesterday afternoon that Mr. Spitzer did not expect to pursue criminal charges against Mr. Murphy right now, while the report said the AG?s office stopped short of clearing Mr. Murphy of all charges.

Mr. Murphy, a tax expert strategic to AIG?s offshore structure throughout his 32 years working in the Bermuda office, is named throughout the May 26 suit from Mr. Spitzer and New York insurance regulator Howard Mills.

Mr. Murphy?s New York-based lawyer Sean O?Shea declined to comment on the matter when contacted by yesterday

Mr. Murphy was fired by AIG on March 27 for failing to cooperate with the regulatory investigation.

He was the third senior AIG executive dismissed for failing to cooperate with investigators, after ex-chief financial officer Howard Smith and former vice-president Christian Milton were asked to leave the company for similar reasons. Mr. Greenberg, who ran New York-based AIG for 38 years, was ousted as chief executive in early March. Under pressure from the AIG board, he also resigned as chairman.

Mr. Greenberg, Mr. Smith, Mr. Milton and Mr. Murphy all saw their AIG careers cut short within a fortnight of each other.

The New York AG?s suit accuses Mr. Greenberg and Mr. Smith of misleading regulators and investors by using sham reinsurance contracts it bought from undisclosed affiliates based offshore, and of using improper accounting to artificially inflate underwriting income.

Measures to exaggerate the strength of AIG?s underwriting business was done to ?prop up? the company?s share price, Mr. Spitzer said in a Press statement issued at the same time as his 38-page complaint in May.

Mr. Murphy is named throughout the complaint, including the allegation he ordered the ?destruction of documents? relating to an offshore affiliate, Bermuda-based Richmond Insurance, and as having extensive involvement in other offshore companies that AIG did business with. He is referred to as ?AIG?s director: foreign companies? in the suit.

In a May telephone interview with Mr. O?Shea said the allegations against Mr. Murphy, in the suit, amounted to a ?knowingly false pleading?, as he personally turned over a transcript of the ?uneventful? meeting in question to the AG?s offices in New York on April 8.

A naturalised Bermuda citizen, Mr. Murphy helped the Bermuda Government negotiate a 1986 tax treaty with the US, and advised on the development of insurance legislation.

He continues to work under Mr. Greenberg at the Bermuda offices of Starr International Company, holding the post of president.

Starr International, a private company named after AIG founder C.V. Starr, is headed by Mr. Greenberg and other former AIG executives. It holds about 12 percent of AIG?s stock, worth some $17 million, at the current market price.

The company, referred to as SICo, was set up decades ago to administer deferred compensation policies for handpicked AIG employees, a programme Mr. Greenberg devised to discourage the company?s most promising from defecting to careers at rival insurers.

SICo, which is incorporated in Panama, was based at AIG?s Bermuda offices until ties were cut in March.