Citibank sued over $36 million fraud by former employee
The usual scenario:
The bank screws up, consumer sues, bank has unlimited funds for lawyers, consumer has nothing (often due to the bank’s fault) and bank wins or settles for next to nothing.
Here we have a MILLIONAIRE and with $36 millions at stake, I sure hope he does what it takes to put Citi in its place.
Millionaire sues Citibank after funds go missing
A reclusive German millionaire is claiming damages against Citibank in what lawyers say is the biggest alleged fraud in Swiss private banking history.
Lawyers for Peter Mikutta, a self-made millionaire who moved to Switzerland after selling his data communications group, last week filed papers claiming SFr44m ($36m) in damages against the US banking giant for dereliction of its fiduciary duties.
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In a separate, but linked, criminal case, Zurich public prosecutors are accusing a former Citibank employee who went to work for Mr Mikutta of fraud and falsifying documents amounting to SFr114m.
The twin cases, to come before the courts next year, are expected to generate immense interest given Switzerland’s famously discrete and dedicated private banks. The country is believed to hold about one-third of the world’s total offshore assets.
The civil and criminal cases allege the former Citibank employee falsified Mr Mikutta’s signature on documents to divert funds from his account for her own uses. The employee’s lawyer, Tanja Knodel, said her client was innocent until proven guilty.
Mr Mikutta’s lawyers allege the bank accepted faxed instructions – sometimes involving multi-million sums – without requesting an original signature or verbally checking the instructions with the account holder.
It is alleged the transfers were approved because the former employee knew the bank’s internal procedures and used her influence and former position as an account manger to bully and cajole staff into doing as she wished. She also regularly threatened to move the account – allegedly Citibank’s largest at the time – to another bank if her requests were not met.
Mr Mikutta, who lives in Zurich, apparently failed to detect that his account was being depleted because he was given periodic performance data purporting to show his money was in safe hands.
His lawyers admit Mr Mikutta contributed to his losses by failing to notice what was happening, but still argue the bank was largely to blame for allowing the transfers to occur.
The civil case follows attempts by Mr Mikutta’s lawyers to negotiate an out of court settlement, which they say Citibank rejected.
The bank, which has hired one of Switzerland’s best known legal firms to defend it, said last night: “In the civil litigation against Citibank (Switzerland) we believe it is without merit and will defend ourselves vigorously.”
The criminal case has been postponed to August after a change of defence lawyer.
I know of so many cases of outright fraud by Citi Financial, and the American consumer lawyers are simply incapable of getting justice for consumers. Most are downright stupid and the few lawyers with legal skills are extremely picky about who to represent. NOBODY wants your case just because a bank defrauded you out of a few hundred dollars and screwed up your credit.
Hopefully there will be lots of media coverage, it will be interesting to see the Swiss legal system in action. And I expect Citi to lose MANY big accounts.
Since Citi denied liability, only an idiot would trust them with large amounts.
Posted by Christine on 12/18/2006 at 06:55 PM
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