Jan. 9 (Bloomberg) -- William Salomon, the 98-year-old former Wall Street banker, testified he trusted a former Citigroup Inc. assistant facing trial on charges that she stole $1.3 million from him to support a lavish lifestyle.
Karen Febles, 48, went on trial today in federal court in Newark, New Jersey, where she is accused of altering checks that he signed and depositing them directly into her own account. Febles, who controlled Salomon’s checkbook, used the money she stole to pay for cars, real estate, cruises and jewelry, a prosecutor told jurors in his opening statement.
Salomon told jurors that he worked from 1933 until 1978 at Salomon Brothers, the investment firm founded by his father and uncles. Citigroup, which bought the firm that became Salomon Smith Barney Holdings Inc., agreed to supply him with an office, a driver, a secretary and a personal assistant, he told jurors.
“Were you not careful in overseeing Ms. Febles’ check writing?” Assistant U.S. Attorney Evan Weitz asked Salomon.
“There’s no reason to have a personal secretary if you can’t trust her,” Salomon said.
Weitz asked if he trusted Febles, who worked for him from 2000 until New York-based Citigroup fired her in September 2011.
“I certainly did,” said Salomon said.
The prosecutor asked if Salomon reviewed bank statements.
“Very seldom,” he said.
Salomon, who wore a black pinstriped suit, glasses and a hearing aid, entered the courtroom in a wheelchair and was helped into the witness stand. He told jurors that he had been married for 61 years before his wife died, and they shared a Park Avenue residence in New York for more than 50 years.
Weitz asked Salomon about his memory.
“I’m as good as I was 10 years or 20 years ago,” he said.
On cross-examination, Salomon said he paid personal employees for more than 60 years without withholding taxes.
Outside the courtroom, Salomon was asked if he felt betrayed by Febles.
“Of course,” he said.
He said he also didn’t expect she would go on trial.
“I was under the impression that she would try to cop a plea,” Salomon said. “But I’m surprised that she did not.”
Febles, of Palisades Park, New Jersey, is charged with bank fraud, wire fraud, money laundering and tax evasion.
In his opening statement today, Weitz said Salomon had once paid some of his employee off-the-books, and he is now paying taxes for them.
Weitz told jurors that Febles used the money she stole to buy a Range Rover and a Merceces-Benz, spent $100,000 on cruises, and paid more than $50,000 in rent one year. Citigroup paid her between $90,000 and $95,000 a year, the prosecutor said.
Febles, he said, altered some checks to make them larger than the ones signed by Salomon.
“He didn’t look at his accounts, he didn’t balance his checkbook,” Weitz told jurors. “He didn’t do that because he trusted Ms. Febles. That trust was terribly, terribly misplaced.”
In his opening statement, defense attorney Edward McQuat urged jurors to keep an open mind in reviewing the evidence.
The case is U.S. v. Febles, 12-cr-406, U.S. District Court, District of New Jersey (Newark).
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