Monday, June 27, 2011

Former Citigroup Official Arrested for Bank Fraud. Accused of stealing $19 million from Citigroup

WSJ has reported that the Federal law-enforcement officials arrested former Citigroup Vice President Gary Foster and charged him with bank fraud for allegedly embezzling more than $19 million from Citigroup.

Foster is charged with transferring money from Citigroup accounts into a cash account and then he wired the money into his personal account at another bank. Foster caused an incorrect contract or deal number to be placed in the wire transfer instructions to hide his activities.

Foster was arrested Sunday morning at JFK Airport when he arrived on a flight from Bangkok.

If convicted, he will face a maximum sentence of 30 years’ imprisonment on the bank fraud charges.

Find below "Press Release" released by United States Attorney office.

Gary Foster, a former vice president in Citigroup, Inc.’s treasury finance department has been arrested on bank fraud charges arising from his embezzlement of more than $19 million. Foster was apprehended at John F. Kennedy International Airport Sunday morning when he arrived on a flight from Bangkok.
(The charges in the complaint are merely allegations, and the defendant is presumed
innocent unless and until proven guilty.)

The defendant’s initial appearance is scheduled this afternoon before United States
Magistrate Judge Ramon E. Reyes, Jr. at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges and arrest were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
According to the complaint, Foster transferred money from various Citigroup accounts to Citigroup’s cash account and then to his personal account at a different bank. Between July 2010 and December 2010, he allegedly caused approximately $900,000 to be moved from Citigroup’s interest expense account and approximately $14.4 million from Citigroup’s debt adjustment account to the bank’s cash account, and then caused the money to be wired out of Citigroup’s cash account to his personal account at another bank in eight separate wire transfers.

The complaint further charges that Foster caused a fraudulent contract or deal number to be placed in the reference line of the wire transfer instructions to create the appearance that the transfers were in support of an existing contract.

“The defendant allegedly used his knowledge of bank operations to commit the ultimate inside job. We are committed to ensuring the integrity of the banking system and to prosecuting those who would undermine it for their personal gain,” stated United States Attorney Lynch.
Ms. Lynch expressed her appreciation to Citigroup, which brought this matter to the attention of the FBI and the U.S. Attorney’s Office.
“The egregious behavior of those who would exploit our banking system for personal and criminal gain will not be tolerated. We remain committed to investigating and apprehending those who cheat the system,” said FBI Assistant Director-in-Charge Fedarcyk.

If convicted, the defendant faces a maximum sentence of 30 years’ imprisonment on the bank fraud charges.
The government’s case is being prosecuted by Assistant United States Attorneys Michael L. Yaeger and Karen Hennigan.

And, Citigroup has acknowledged that about $2.7 million was stolen from about 3,400 accounts on May 10 th Hack attack.

Citigroup mentioned that the customers will not be responsible from financial losses stemming from the attacks.

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