A woman who was sued by American Express Co. (AXP) over an alleged scam where she posed as a Saudi princess to steal thousands has countersued the company, saying she was mentally incompetent when she opened her account and the company should have known it.

The countersuit was filed by Antoinette Millard (search), 40, free on $100,000 bail and awaiting trial on attempted grand larceny charges for alleged scams carried out while she posed as a Saudi Arabian princess and a Victoria's Secret model. She was neither.

Millard, a former vice president at the Brown Brothers Harriman (search) investment bank, countersued for $2 million in Manhattan's State Supreme Court after Amex obtained a court order of attachment freezing more than $951,000 of her assets for unpaid charges.

Millard's court papers say that to "induce" her to establish a Centurion account (search), the account through which Amex customers get the rare and envied Centurion "black" card, the company promised she could make flexible payments.

The court papers say the promise was "false and fraudulent" and "in truth and in fact (American Express) did not allow (Millard) to make flexible payments" on the account.

Millard, her lawsuit says, "was suffering from anorexia, depression, panic attacks, head tumors and by reason of such illnesses was mentally incompetent and unable of executing or making any agreement as alleged" in Amex's complaint.

American Express "knew or should have known that (Millard) was acting impulsively and and irrationally at the time she entered into contract," her court papers say.

The larceny charges against Millard stem from her allegedly trying to steal $262,000 from an insurance company by falsely reporting that her jewelry had been stolen, the Manhattan district attorney's office said.

Prosecutors alleged that Millard, arrested in May at her Manhattan home, had in fact sold the jewelry and then tried to collect insurance on it. She is charged with insurance fraud, attempted grand larceny and possession of a forged instrument.

Millard faces up to 15 years in prison if convicted on the insurance fraud charge, the top count.