Ex-Citigroup exec pleads guilty to embezzling $22M
September 6, 2011
Gary Foster pleaded guilty in Brooklyn federal court to bank fraud charges and now faces up to 10 years in prison as part of a plea deal with federal prosecutors.
Because he is legally blind, Foster could not drive -- so he hired a chauffeur to drive him around in his high-end sports cars, sources said.
The 35-year-old former Citigroup vice-president also could be fined as much as $44 million - or twice the amount he defrauded the bank.
The US Attorney's Office in Brooklyn has already seized $16 million in real estate holdings and personal property that Foster acquired with the funds, including showcase apartments in Manhattan and Brooklyn, as well as homes and apartments in New Jersey.
As part of the plea deal, the feds also seized imported automobiles the banker bought, such as a Ferrari, a Maserati GranTurismo and a BMW 550i, Assistant US Attorney Michael Yaeger told the court.
The 12-year Citigroup veteran quit the bank in January and was arrested earlier this summer at Kennedy Airport as he was getting off a flight from Bangkok.
Before leaving his assistant vice president post in the Long Island City, Queens, offices of the bank's treasury finance department, Foster earned $100,000 annually managing its internal investments.
Foster's embezzlement scheme began in Sept. 2003 and continued into 2011, prosecutors said.
"It is alleged that he obtained over $22 million," Yaeger told Judge Eric Vitaliano. Foster admitted in court that he had wired the money from internal Citi accounts into his personal Chase bank account and wrote e-mails and sent faxes to order the transfers.
"I did this from my Citigroup office in Queens County, New York," Foster told the judge.
Prosecutors say he covered up the scam by assigning phony contract or deal numbers to make the transfers appear bona fide, and had himself assigned as contact person if there were problems. Foster allegedly dropped $12 million of the embezzled money on properties in Midtown and New Jersey, bought a Garden State house for his parents and paid off a mortgage for his ex-wife.In December, a month before quitting, Foster dropped $3 million on a 10,000-square-foot, six-bedroom mansion in Englewood Cliffs, NJ, and $1.93 million on a Rockefeller Center apartment right across West 48th Street from a Citi branch.
The Rutgers University grad also bought two condos worth a combined $2.5 million in a Jersey City glass-tower high-rise overlooking the Hudson River in Crystal Point. In a news article, Mr. Foster said that he had no plans to buy a condominium in Crystal Point, a 42-story glass tower in Jersey City. But he was so blown away by its sweeping views of the Manhattan skyline, he decided to buy a unit on the 33rd floor. It sold for $915,000 in February 2010, according to property records. âI came here very pessimistic,â said Foster, who works in the financial industry in the city. âBut then I walked into the unit and was like, âWow. This is a really great view.â It was the view that really won me over.â The article, in The Record, describes the apartment of having floor-to-ceiling windows that line the two bedrooms and a living room that appears to float over the water. The view, the article says, stretches from the George Washington Bridge to Lower Manhattan and New York Harbor. Mr. Foster gushed about his new pad: âI love it when it starts to get dark, all the different colors in the sky and when the buildings start to light up,â said Foster, who closed in February and moved in April. Indeed, Mr. Foster must really have enjoyed the view. Ten months later, in November 2010, he paid $1.625 million for a penthouse apartment in the very same building, according to property records.
