Citibank Stole $14 Million from its Customers!
Now, confronted, Bank agrees to stop illegal 'sweeps,' make refunds
            TOO LITTLE TOO LATE !!

                                "ON the News TODAY, OH NO!"             Beatles lyric

• California: Citibank Stole $14 Million from its Customers
• Macy's Customers Get New Citicards--Like It Or Not
• Citibank's Cards Mysteriously Shut Down!

California Attorney General Edmund G. "JERRY" Brown Jr. (Ex governor,) announced that he has
reached a settlement with Citibank after a three-year investigation
into the company’s use of an illegal “account sweeping” program.

Nationally, the company took more than $14 million from its
customers, including $1.6 million from California residents, through the use of a
computer program that wrongfully swept positive account balances from
credit-card customer accounts into Citibank’s general fund, Brown said.

“The company knowingly stole from its customers, mostly poor people
and the recently deceased, when it designed and implemented the sweeps,”
Jerry Brown said. (Governor Moonbeam) “When a whistleblower uncovered the
scam and brought it to his superiors, they buried the information and continued the illegal practice!”

Between 1992 and 2003, Citibank employed a computerized “credit
sweep” process to automatically remove positive or credit balances from
credit-card customer accounts.

An account could show a credit balance if a customer double-paid a
bill or returned a purchase for credit. The credit sweeps were done without
notifying the customer and without regard for whether the customer had any
unpaid balances or other charges owed to Citibank.

The credit sweeps targeted more than 53,000 customers nationwide. All
of the affected accounts were in a recovery status, which includes accounts
of customers who have died, sought bankruptcy protection, or been the
target of litigation or other collection efforts by Citibank.

In July of 2001, a Citibank employee uncovered the practice and
brought it to the attention of his superiors. The employee was later fired
for discussing the credit sweeps with an internal audit team.

In the words of a Citibank executive, “Stealing from our customers is
a business decision, not a legal decision.” The same executive later said
that the sweep program could not be stopped because it would reduce the
executive bonus pool, Brown charged.

The attorney general's office launched its investigation of Citibank
in 2005 to determine whether the company violated the California False
Claims Act by filing false holder reports with the California State
Controller that omitted any reference to the swept funds. The 3-year
investigation led to today’s settlement.

The settlement includes:

• Permanent injunction – Citibank will be permanently prevented from
re-initiating the credit sweeps.

• Refunds to victims – Citibank will refund all improperly swept
funds
to customers who were victimized by the sweeps. Citibank will also pay
California customers 10% interest on the amount taken.

• Penalties – Citibank will pay $3.5 million in damages and civil
penalties to the State of California.

• Compliance audit – After Citibank’s refund process is complete, an
independent auditor will review Citibank’s work to ensure that it has lived
up to its obligations.

Citibank has affirmed that it can identify most of the victims of the
credit sweeps and has begun the process of reviewing archived account data
and refunding the improperly swept funds going back to 1992.

New York Charges
Earlier this month, Citigroup Global Markets, Inc. and Citi Smith
Barney have agreed to settle allegations stemming from its marketing and
sales of auction rate securities. The firm marketed and sold auction rate
securities as safe, cash-equivalent products, when in fact they faced
increasing liquidity risk, a number of states alleged.

New York Attorney General Andrew M. Cuomo hailed the agreement as a
turning point for investors nationwide seeking relief from the collapse of
the auction rate securities market.

"The settlement sends a resounding message to the entire auction rate
securities industry: this type of deceptive behavior will not be tolerated
and we will actively seek justice on behalf of investors in auction rate
securities," said Cuomo. "Our goal is simple: to get investors back their
money, and that's exactly what this deal does."

Under the settlement, Citigroup has agreed to buy back, no later than
November 5, 2008, all illiquid auction rate securities from all Citigroup
retail customers, charities, and small to mid-sized businesses. These
customers, who number approximately 40,000 nationwide, have been unable to
sell their securities since February 12, 2008. Their securities are worth
more than $7 billion.

Citigroup will also:

• fully reimburse all retail investors who sold their auction rate
securities at a discount after the market failed;

• consent to a special, public arbitration process to resolve claims
of consequential damages suffered by retail investors as a result of not
being able to access their funds;

• undertake to expeditiously provide liquidity solutions to all other
institutional investors; and

• reimburse all refinancing fees to any New York State municipal
issuer who issued auction rate securities through Citigroup since August 1,
2007.

In addition, Citigroup will pay a $50 million civil penalty to the
State of New York. The penalty embraces both Citigroup's substantive
conduct and its failure to properly comply with its obligations under the Attorney
General's Martin Act subpoena.

Citigroup also will pay a separate civil penalty of $50 million to
the North American Securities Administrators Association, whose ARS Task Force
has been conducting its own series of investigations into the marketing and
sale of auction rate securities by broker-dealer firms.

This goes to show you that Governor Moonbeam is no Twit! No wonder
Linda Rondstadt Loved him! He's an ARIES. They get mad AND fight!

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