Insurer American International Group Inc. has sued a former accounting vice president, accusing her of refusing to return company computers and confidential information, in an attempt to “harass, extort and injure” the company.

AIG filed its breach-of-contract claim against Dong Chung in federal court, alleging that she made allegations of accounting improprieties at the company after being terminated earlier this month for performance deficiencies and rank insubordination.

Chung worked for the insurer for less than a year, but AIG said that she has a history of "harassing her former employers and lodging baseless allegations.'' Chung, believed to be living in Hong Kong, hasn’t spoken publicly about the charges. She 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.

After refusing to pay a settlement, AIG says that Chung began sending privileged and confidential company legal memoranda to competitors and litigation adversaries. The suit also alleges that Chung has ignored company demands to return a BlackBerry pager and two company laptops issued to her.

Last year, New York-based AIG announced it would restate more than four years of its earnings and said that former executives were able to circumvent internal controls over financial reporting.

Earlier this year, AIG agreed to pay more than $1.6 billion to settle accounting fraud allegations by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission.


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