An American International Group Inc AIG.N unit and a philanthropist traded lawsuits on Friday over a partnership gone sour involving billions of dollars in life insurance policies sold by elderly individuals in exchange for cash. AIG's Lavastone Capital said in a lawsuit filed Friday in New York federal court that it had paid Coventry First of Fort Washington, Pennsylvania, more than $1 billion since 2006 to help it acquire the policies, known as "life settlements." Coventry, whose chief executive is Philadelphia philanthropist Alan Buerger, is the "leader and creator" of the life settlement industry, according to its website. Investors who acquire a policy cover the premiums until the individual's death and then collect the payout. Rather than identifying appropriate policies and selling them to Lavastone at the elderly individuals' asking price, the lawsuit claimed, Coventry used a network of shell companies to artificially inflate the prices to Lavastone. The fraud cost Lavastone
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