The troubles at AIG continue to hold the headlines, as investigators are now digging into whether Joseph Cassano, the former head of London-based AIG Financial Products, and two of his top deputies--EVP Andrew Forster and Connecticut-based managing-director Thomas Athan--committed securities fraud and other federal crimes, reports the Wall Street Journal and CBS News.

Investigators are also looking at multiple ways these executives may have misled the company's auditors and investors about the value of derivatives the firm sold, people familiar with the case told WSJ. In particular, federal prosecutors are focusing on a December 2007 investor presentation in which Cassano said write-downs tied to the swaps had reached an estimated $1.6 billion, which is now under question.

Cassano left AIG last year and Forster and Athan are still at the company and are among those who received retention bonuses in March, the WSJ reports. These bonuses became the fodder of the greater press’ coverage in February, and stirred public controversy in the process. The CBS News report lists a $5 million Connecticut mansion, a $4 million London townhouse and a $7 million English estate as being owned by the three men now the subjects of a Justice Department AIG criminal investigation. Both men still at AIG are among those who have agreed to give their bonuses back, reported CBS News, and have not been charged with wrongdoing. Lawyers for Messrs. Cassano, Forster and Athan declined to comment about the case. A spokeswoman at the Justice Department and a spokesman at the SEC declined to comment. AIG said in a statement that it is cooperating with authorities.

AIG former Chief Executive Martin Sullivan, who left the firm amid its woes last year, isn't a target of the probe, people familiar with the matter said. A lawyer for Sullivan didn't respond to requests for comment.

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