“The Ultimate Inside Job” Takes $19 Million
Gary Foster, 35 years old and a former vice president in Citigroup’s treasury finance department has been charged with embezzling over $19 million from the bank, according to Investment News. Mr. Foster was captured at New York’s JFK Airport upon his arrival home from Bangkok, according to the U.S. Attorney’s office in New York. According to an attorney working the case, Foster used his knowledge of the bank’s daily operations to “commit the ultimate inside job.”
As is usual in these types of cases, Mr. Foster lived high on the hog with the money he embezzled. For example, he allegedly used $12 million on properties in Midtown New York, New Jersey, a house for his parents and paying off a mortgage for his former wife. Shortly before he left Citigroup, he spent $3 million on a 10,000 square foot, six bedroom mansion in Englewood Cliffs, NJ and another $1.93 million on a Rockefeller Center apartment. Obviously, Foster had a desire for prime property since he also had two condominiums worth $2.5 million in a Jersey City high rise overlooking the Hudson River. Sources have indicated that one of his houses had ceilings painted in gold leaf and bathroom mirrors that turned into television screens at the press of a button. Among his other extravagances he loved to go to spas, getting facials, massages and enjoying the nightclub scene wearing expensive watches and paying as much as $2,000 for bottle service.
Records indicated that Gary Foster was employed by Citigroup in 1999 and left voluntarily in January 2011. He had worked in the Long Island City section of Queens, NY for Citigroup where he executed the transfer of approximately $900,000 from Citigroup’s interest-expense account and about $14.4 million from its debt-adjustment account to the bank’s cash account during the time period from July 1999 to December 2010, according to prosecutors working the case. After the money was in the bank’s cash account, Foster the wired the money out to his personal account at JP Morgan Chase & Company in 8 different transfers. Foster, who supervised the department’s derivatives unit, doctored the transfer instructions with bogus contract or deal numbers to make it look like the transfer was legitimate. According to the complaint, the total heist was $19.2 million. The maximum sentence possible for bank fraud is 30 years, if convicted.
A spokesperson for Citigroup said that the transfers from the bank’s cash account to Foster’s personal account at JP Morgan were discovered during an internal audit. She went on to say that the bank was “outraged by the actions of this former employee” and that they “are cooperating fully to ensure that Mr. Foster is prosecuted to the full extent of the law,” as reported by Bloomberg.