Citibank staffer dupes clients in Rs400 crore fraud; FIR filed

Citibank on Tuesday said it has filed an FIR with the Gurgaon police after an internal probe revealed some suspicious transactions based on documents forged by an employee. “The suspicious transactions involve a few accounts in our Gurgaon branch,” a spokesperson said. Other account holders remain unaffected.

A relationship manager allegedly siphoned off funds from the accounts of over 30 customers after promising supernormal returns on a fraudulent investment scheme. It is suspected that one or two individuals outside the bank were also involved, said a source.

“We recently initiated an investigation into a certain set of suspicious transactions based on documents forged by an employee involving a few accounts in our Gurgaon branch. We immediately reported the matter to all the relevant regulatory and law enforcement authorities,” a Citi statement said. “The complaint was lodged on Monday and we are still investigating,” a police officer said.

The operation had gone on for a few months, and involved an employee who had gained access to details about high networth individuals at the Citibank branch. The victims were part of the wealth management division at the branch and typically have in excess of a crore to invest.

The employee approached these individuals with a new investment product, with the assurance that it had approval from the Securities and Exchange Board of India and would give returns of 15-20% —- more than twice those of fixed deposits. The money was to be transferred to the fraudster’s account. While the exact amount involved could not be confirmed, a television channel report pegged the figure at Rs400 crore.

The bank is still ascertaining how much of the funds can be recovered. Citi officials were alerted to the scheme and launched an investigation two weeks ago. Once they confirmed the suspicious activity, it was reported to the proper authorities. A source said Citi has alerted both Sebi and the Reserve Bank of India.

“Identified suspicious transactions have been isolated and we are providing full assistance to the authorities in their investigations. This issue does not impact other accounts, transactions or customers of the bank,” the bank statement said.