A Citi senior risk analyst is not entitled to a portion of the $400 million fine the Office of the Comptroller of the Currency (OCC) levied against the bank in 2020, a district court judge ruled last week.
“Nothing in the 2020 Order suggests that the fine was imposed for deficiencies in Citibank’s oversight of third-party vendors,” Judge Denise Cote of the U.S. District Court for the Southern District of New York wrote Wednesday.
Plaintiff Tamika Miller’s qui tam action alleged Citi suppressed critical audits of its third-party vendors, giving regulators a breadcrumb trail culminating in an examination of conduct that would reveal deficiencies across the company, one of her attorneys had told Law360 in January.
That alleged suppression violated federal law and two 2015 consent orders with the OCC and Consumer Financial Protection Bureau (CFPB), Miller asserted. However, before handing Citi the 2020 order, the OCC released Citi from its obligations under the 2015 order, Cote wrote Wednesday.
U.S. attorneys, in an opposition filed in April, contended the workstream within the OCC that addressed Miller’s complaint “was separate and distinct from the then-already ongoing OCC workstream that was handling and discussing the supervisory concerns ultimately addressed in the 2020 [civil penalty].”
The attorneys called the 2020 order "the culmination of several years of work by the OCC's Citibank examination team to address certain of the bank's deficiencies through the OCC's supervisory process."
Miller’s motion must be denied because her allegations do not state a reverse false claim under the False Claims Act (FCA), Cote ruled.
Further, the judge denied Miller the opportunity to amend her claim.
"The complaint is premised on a misunderstanding of the kinds of obligations covered by the FCA's reverse false claims provision," Cote wrote. "This misunderstanding cannot be cured by amendment."
Miller, in her complaint, failed to specifically identify some of Citi’s violations or falsified reports, or "state with particularity the circumstances constituting fraud," Cote ruled.
"Citibank's alleged violations of federal law or consent orders may have subjected it to liability, but they did not give rise to an ‘obligation' within the meaning of the FCA,” Cote wrote.
Government representatives declined to comment to Law360 on the matter, and attorneys for Citi didn't immediately respond to a request for comment.
Miller’s attorneys, however, expressed disappointment in a statement Thursday to the publication.
"Ms. Miller risked her career to disclose Citibank's misconduct, which was resolved as part of a $400 million penalty," they wrote. "Without whistleblowers like Ms. Miller, regulators would be uninformed and unlikely to uncover the depth of wrongdoing committed by big banks and other large financial institutions."
