Citigroup ex-VP arrested in NYC on fraud charges

Headline Legal News

A former Citigroup vice president embezzled $19.2 million from the bank in a one-man "inside job" involving a series of secret money transfers, federal prosecutors said Monday.

Gary Foster, 35, of Englewood Cliffs, N.J., surrendered Sunday at John F. Kennedy International Airport after arriving on a flight from Bangkok. He was released Tuesday on $800,000 bond after appearing in federal court in Brooklyn to face bank fraud charges carrying a maximum penalty of 30 years in prison.

Foster had been traveling in Southeast Asia when he received word of the case, defense attorney Isabelle Kirshner said after the court appearance.

"As soon as he became aware they were looking for him, he voluntarily contacted the FBI and arranged to return," Kirshner said.

Officials at Citigroup Inc. — where Foster was vice president of the treasury finance department until quitting in January — said in a statement that they were "outraged by the actions of this former employee" and hoped to see him "prosecuted to the full extent of the law."

Foster "used his knowledge of bank operations to commit the ultimate inside job," U.S. Attorney Loretta Lynch said in a statement.

According to a criminal complaint, Foster's department financed loans and processed wire transfers within Citigroup. From May 2009 through the end of last year, Foster siphoned funds from various Citigroup accounts, placed them in the bank's cash account and then wired the money into his private account at another bank in New York, the complaint alleged.

In one November 2010 transaction, Foster wired $3.9 million from a Citigroup fund in Baltimore to his New York account, the complaint says. That fraudulent transfer and seven others went undetected until a recent internal audit, it said.


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