News

Former Citigroup Employee Arrested For Embezzling $19 Million

Apparently Gary Foster “used his knowledge of bank operations” to get the job done.

Foster, according to the U.S. Attorney’s Office in New York, is being charged with embezzling more than $19 million from Citigroup. He was arrested Sunday morning at JFK Airport when he arrived on a flight from Bangkok, the U.S. Attorney’s Office said in a news release.

According to a court case against him, 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, the DOJ said.

Let this be a lesson to those considering taking a page from Foster (or brother from another mother Jim Glover)’s playabook- attention to detail counts!

Update: from the complaint:

Mr. Foster, who supervised a derivatives unit, was based in the bank’s office tower in Long Island City. He worked in the internal treasury finance department, which funds loans and other business transactions inside Citigroup.

In a series of eight transfers, between July and December 2010, about $900,000 of the money he allegedly took came from the bank’s interest expense account, while an additional $14.3 million came from its debt adjustment account, the complaint said. The transactions went unnoticed until a recent audit, a Citigroup investigator told the Federal Bureau of Investigation, the complaint says. In one transfer cited by the authorities, he allegedly wired himself $3.9 million on Nov. 8, 2010. Mr. Foster allegedly put phony contract or deal numbers in the reference lines for his wire transfers to make them look like they were for legitimate contracts.

Former Citigroup Official Arrested for Bank Fraud [Deal Journal]
Former Citi Exec Charged In $19 Million Theft [WSJ]

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96 Responses to “Former Citigroup Employee Arrested For Embezzling $19 Million”

  1. Dr. Rosenrose says:

    Alright so when the sub routine compounds the interest it uses all these
    extra decimal places that just get rounded off. So we simplified the
    whole thing, we rounded them all down, and dropped the remainder… into an
    account we opened. 

    • Roblon000 says:

      JOANNA
      So you’re stealing.

      PETER
      Ah, no. No. You don’t understand. It’s, uh, very complicated. It’s, uh,
      it’s, it’s aggregate so I’m talking about fractions of a cent that, uh,
      over time, they add up to a lot.

      JOANNA
      Ok. So you’re gonna make a lot of money, right?

      PETER
      Yeah.

      JOANNA
      Ok. That’s not yours?

      PETER
      Well, it, it becomes ours.

      JOANNA
      How’s that not stealing?

      PETER
      I don’t think, I don’t think I’m explaining this very well. Um, this
      Seven Eleven, right? If you take a penny from the tray –

      JOANNA
      From the crippled children?!

      PETER
      No, that’s the tray. I’m talking about the tray. The penny’s for
      everybody.

      JOANNA
      Oh, for everybody. Ok.

      PETER
      Yeah, well, those are whole pennies.

      JOANNA
      Yeah.

      PETER
      Right. I’m just talking about fractions of a penny here, but we do it
      from a much bigger tray. A couple of million times. So what’s wrong
      with that?

      JOANNA
      It seems wrong.

      PETER
      It’s not wrong. Initech is wrong. CITIGROUP is an evil corporation, all
      right? Chotchkie’s is wrong. Doesn’t it bother you that you have to get
      up in the morning and put on pieces of flair?

      JOANNA
      Yeah, but I’m not about to go in and start taking money from the
      register!

      PETER
      You know, the Nazis had pieces of flair but they made the Jews wear
      them.

      JOANNA
      What?!

      PETER
      Look, we don’t – I, I – we don’t have to talk about this. Let’s just go
      to the barbecue, all right?

      JOANNA
      Ok.

  2. Guy who smells something fishy says:

    CITI had $19MM? Thats the real story here!

  3. Citi Operations Director says:

    What’s a wire transfer?

  4. Soi Cowboy says:

    Coming back from Bangkok??? Did he forget his ATM card at home?

  5. Guesty says:

    Wait – he MADE 19 million? Where the hell have we been hiding this guy?

    – Vik

  6. CitiNeverSleeps says:

    Thinking they ought to be arresting Chuck “Musical Chairs” Prince who cost the bank a lot more. Might as well throw in Pandit, too, for his fund’s performance post acquisition. 

  7. in love with pmco avatar says:

    i was only doing what Sandy asked me to do, this way it would be a black mark against Chuck

  8. Tim Geithner says:

    Does he have to pay income tax on the full amount? 

  9. Basic Internal Controls says:

    So how does he have the authority to wire money from any account at Citi to his personal account at another bank? Even with a bogus deal number, this seems pretty prosaic. What if someone smart attempted to steal money. Would they ever get caught?

    • Guest says:

      Someone smart would have to take a job at a Citi before anyone has to worry about that.

  10. Guest says:

    19 million? Tier 1 wiped out .

  11. DB is putting up old news. I saw this guy’s arrest in Hangover 2 after he survived a drug overdose. 

  12. DB is putting up old news. I saw this guy’s arrest in Hangover 2 after he survived a drug overdose. 

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