Citi Whistle-Blower Asks Judge for Share of $400 Million Fine
Jan 31, 2022
Miller began sharing relevant information about Citigroup’s compliance procedures with authorities in 2019, according to the filing. Miller, who is based in Texas, said she has worked in Citigroup’s risk department since 2014 after receiving her undergraduate degree in business from Davenport University, based in Michigan, in 2011, the filing said. According to Miller’s filing, Citigroup lied to regulators about its internal controls and filed fraudulent reports. For years, the bank’s central system that housed all of its audits on outside parties was plagued with conflicts of interests and other problems, Miller alleged. Citigroup staffers minimized issues in audit reports so they appeared to be minor infractions that didn’t need to be flagged to regulators, when they would otherwise have resulted in a failing grade, Miller said. She also accused Citigroup of altering reviews she wrote -- internal ones, as well as those that were distributed to third parties, such as regulators -- to downplay concerns she raised about the bank’s controls. Miller said she reported her concerns to Citigroup’s ethics department in 2018 and was told an investigation would be conducted. Ultimately, she said, the bank informed her no violations were found. “The ‘investigation’ was hardly an investigation at all,” Miller said in her complaint. “Instead I was instructed going forward not to return to ethics with any future concerns. In fact, I was told to report any future concerns to my senior management, even though it was my senior management who was engaged in manipulating” the system, she said in the filing. Regulator Meetings
Her court motion offers a glimpse into how bank enforcement actions unfold. Within weeks of her having handed over documents detailing Citigroup’s actions to regulators, an attorney for the OCC reached out to ask Miller for more information chronicling the bank’s alleged misdeeds, she said. In the ensuing months, Miller said she spoke with officials at the OCC, and the Consumer Financial Protection Bureau, as well as representatives from the U.S. Attorney for the Southern District of New York. Miller recounted specific details about her interactions, including how one OCC official wore a medical boot from a foot injury during a meeting. The official also indicated to Miller that they were concerned about her “job security given the damning information” she supplied, according to the filing. The OCC has its own whistle-blower procedures , though it is not known for the high-profile payouts that other agencies such as the Securities and Exchange Commission have doled out in recent years. Following the enforcement action, Citigroup said it spent months and dedicated more than 4,000 people to resolving regulators’ concerns. “As it relates to the consent orders, we are deep into execution mode,” Citigroup Chief Executive Officer Jane Fraser told analysts on a conference call this month. “We continue to be in constructive dialog with our regulators as we get their feedback and incorporate it into our ongoing execution and project plans.”
The case is United States of America ex rel. vs. Citigroup Inc., 1.19-cv-10970, U.S. District Court for the Southern District of New York (Manhattan). ©2022 Bloomberg L.P.