A federal grand jury has indicted a top American International Group ( AIG) executive for taking part in a convoluted foreign bribery scheme.

Prosecutors in New York on Thursday charged AIG Managing Director David Pinkerton and two other men with "participating in a massive scheme" to bribe several senior government officials in Azerbaijan. The 27-count indictment charges the men with conspiring to violate the Foreign Corrupt Practices Act.

The three men allegedly paid bribes to officials in the former Soviet republic in order to get them to follow through on a plan to privatize the nation's state-owned oil company. Pinkerton, in 1998, had arranged for AIG to invest $15 million in "privatization vouchers" being sold by the Azerbaijan government, the government says.

The giant insurer placed Pinkerton, a managing director of AIG Global Investment Group, on administrative leave following the announcement of the indictment. AIG Global Investment is a private equity arm of the New York-based insurer.

In a press release, AIG, which claims it and other foreign investors were defrauded in the transaction, says it has fully cooperated with investigators.

The allegations against Pinkerton are not related to a separate federal criminal investigation into allegations that AIG participated in a scheme to prop up its stock price by masking declines in its claims reserves and massaging quarterly earnings.

On Thursday, AIG shares rose 68 cents to $61.79.

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