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Fraud at Palo Alto branch costs Citigroup $500K

Original post made on Aug 10, 2011

The failed supervision of a Citigroup branch employee in Palo Alto has resulted in a $500,000 fine for the parent company, Citigroup Global Markets, Inc.

Read the full story here Web Link posted Wednesday, August 10, 2011, 2:14 PM

Comments (6)

Posted by white collar crime, a resident of Adobe-Meadows
on Aug 10, 2011 at 3:04 pm

Citizens are up in arms when robbers steal $75 from people on the street. How much do white collar criminals steal from the public? A $749,978 theft is probably considered a petty theft among white collar criminals. White collar crime also played a big part in the recent recession (starting 5 years ago and apparently not over yet). Why don't we have more law enforcement officers focusing on white collar crime? Street crime hardly matters in the grand scheme of things.

And why don't the newspapers publish mug shots of white collar criminals? If a street criminal stole even a fraction of this amount, you bet their photo would be on the front page.


Posted by Agreed, a resident of Another Palo Alto neighborhood
on Aug 10, 2011 at 3:40 pm

I agree. And we never hear the real world damage to people when they are victims of these crimes.

I saw a story on the news about how bank employees can steal out of safe deposit boxes. So i went to chek mine, and the only jewelry i had in there of significant value, my grandparents wedding rings, were not there. I have no way to prove the loss. At least with these accounts, there is a potential paper trail. With safe deposit boxes, there is no such trail.


Posted by Les, a resident of Adobe-Meadows
on Aug 10, 2011 at 8:05 pm

Unfortunately, smaller municipal police departments are not equipped or have the staffing to handle these type of investigations. In Palo Alto Police Department's case, even less so with the recent cuts and reductions. From what I gather, city departments are relegated to dealing with the most front line, immediate response, street level crimes.

These institutional crimes are usually handled by state or federal agencies. I do agree with the previous posters however. The impact on society may not be as visible, but is infinitely more damaging. More resources need to be allocated to combat white collar crime.


Posted by Los Altos resident, a resident of Los Altos
on Aug 11, 2011 at 12:02 am

It's really no surprise to me that the management at Citibank didn't keep a watchful eye or train their staff better. I had an acct at Citibank in Los Altos and when I went to close it, I simply showed them my statement and got a check for the amount in the acct which wasn't an enormous amt but a couple grand... no id or anything and I got a check just like that. I was scratching my head as to why they didn't bother to verify I was who I was i.e. ask for a CDL but oh well - it was mine but as you can imagine, the teller should have known better.


Posted by GoFigure, a resident of Menlo Park
on Aug 11, 2011 at 11:35 am

While I'm glad this criminal has been caught and is being punished. And I'm glad her employer is being held accountable.

However, why is this 'small' crime being hit with a half million dollar fine when the parent corp is implicated in billion dollar messes with token punishment?


Posted by FormerCitigroupEmployee, a resident of Evergreen Park
on Aug 12, 2011 at 7:06 am

I worked for this company many years ago (different location). I saw so many red flags but kept being hushed by managers. Just before I quit, I saw the person in our group with THE WORST record of making mistakes and being accused of insider trading PROMOTED TO COMPLIANCE OFFICER. Yes, they put the fox in charge of the hen house... I have no idea how much further things may have gone downhill since then.

In contrast, I can tell you that many financial institutions are VERY safe & secure and some even squeeky-clean. The police would be completely out of their element if they tried to investigate financial fraud and other similar crimes. These things are best handled by regulatory agencies such as the SEC and NASD. For the most part, these agencies do a very good job overseeing and regulating the industry. But things sometimes fall through the cracks for a while and this is one example. Ultimately, they did figure it out. And fining the company for lack of oversight is, in my opinion, the right thing to do. $500K may be small change for them. But I'm sure some manager's job is in jeopardy now, if not already eliminated. And of course the employee who executed the crime is being punished as well.

Our system is flawed. But it could be worse. It's just another lesson that we should all watch out for ourselves. Safety deposit box? Why would anyone use one of those if they really wanted their stuff to be safe?? ;-)


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