Posted May 13, 2013 03:45 pm CDT
The 99-year-old son of a founder of Salomon Brothers has sued Citigroup, contending that the bank breached a retirement contract by assigning him and failing to supervise adequately a personal secretary who allegedly stole $3 million of his personal funds.
William Salomon, who began working for the famed investment bank in 1933, retired in 1981 after serving as its chief for roughly a ten-year period in the 1960s and 1970s. A consulting contract Citigroup assumed when it purchased the firm then known as Salomon Smith Barney Holdings Inc. provided him with an office, two secretaries and support services, according to the suit he filed last week in state court in Manhattan.
After Karen Febles, now 48, began working for him in 1997, Salomon decided he only needed one secretary. Starting in 2005, his suit alleges, she employed “systematic theft” to steal $3 million from him, reports Bloomberg.
“Citigroup failed to institute any supervisory procedures whatsoever over Febles, notwithstanding that she was its employee working off-site for an elderly man and assisting him with personal financial matters,” the breach-of-contract complaint contends.
But Citigroup says Febles, who was federally convicted earlier this year of embezzling $1.3 million from Salomon, is solely responsible.
“Ms. Febles acted entirely outside the scope of her employment with Citi in handling the personal finances Mr. Salomon entrusted to her,” a Citigroup spokesman told Bloomberg in an e-mail. “She was prosecuted and convicted with Citi’s full cooperation. It is Ms. Febles, not Citi, who is responsible for Mr. Salomon’s financial loss.”
“There’s no reason to have a personal secretary if you can’t trust her,” Salomon testified in federal court at her trial.
Febles altered amounts of checks with duplicate numbers to supplement her annual salary, which never exceeded $95,000, in order to indulge in a lavish lifestyle, according to evidence presented at the trial.