MANHATTAN (CN) – JPMorgan Chase Bank says a former vice president embezzled $2.8 million from a customer’s account, then took it on the lam to Argentina. And the bank says that came after he embezzled $2.5 million from a client at his previous job, with UBS.
In its federal complaint, Chase Bank says that Hernan Arbizu fraudulently transferred money from a customer’s account to cover up his theft from a previous client’s account.
Chase says it has “fully reimbursed” its customer.
Arbizu, who is in his early 40’s, worked as a financial adviser at UBS International until November 2006 when he began working for JPMorgan, according to the complaint. The Argentina native was a vice-president in JPMorgan’s private banking division, where he managed “relationships with high net worth Argentine clients,” according to the complaint.
Chase says that in May 2008, it discovered that Arbizu had stolen money from a customer account, and immediately fired him.
Upon investigation, the bank says it found that Arbizu had transferred the customer’s money to the account of a UBS client, from whom he had previously stolen millions of dollars. The bank says Arbizu was trying to “cover the shortfall” when the UBS client demanded its money for a real estate investment.
Chase claims that Arbizu made four wire transfers from its customer’s account, which contained forged signatures, “as well as a false written statement by Arbizu that the client had signed the instructions in [his] presence.”
“Arbizu initially denied knowing anything about the unauthorized transfers, but subsequently admitted stealing the money from the customer’s account,” the complaint says.
Arbizu was indicted on 15 counts of wire fraud in July 2008, but has yet to face the charges in the United States, according to the complaint, which says that Arbizu ultimately stole more than $5.3 million. Federal officials are trying to get Arbizu extradited, according to the complaint.
The New York Times has reported that Arbizu “said that in order to maintain an aura of success with major UBS clients, he pretended to remain their personal banker even after he left for Chase.” Arbizu “regularly dipped into UBS client accounts – even visited the Swiss giant’s offices in Manhattan to ensure that the illicit transactions went through – for at least a year after he left,” the Times reported this summer.
JPMorgan sued Arbizu in 2008 claiming that in addition to the money, Arbizu also stole the bank’s confidential information. A federal judge granted an injunction and restraining order for the return of the bank’s sensitive materials.
JPMorgan sued for breach of contract, breach of fiduciary duty, fraud and conversion. It wants Arbizu to return the stolen money.
The bank is represented by Andrea Likwornik Weiss with Levi Lubarsky & Feigenbaum.