- Arbizu pleads not guilty to 15 charges of embezzlement, fraud
- Ex-banker admitted to fraud in 2008 Bloomberg interview
A former JPMorgan Chase & Co. private banker appeared in a U.S. courtroom after eight years on the run in Argentina where he fled to avoid embezzlement and fraud charges.
Hernan Arbizu pleaded not guilty to 15 counts on Thursday after being accused in a 2008 indictment of stealing more than $5.3 million from customer accounts at UBS AG and JPMorgan by making at least a dozen unauthorized transfers. He’s in plea talks with the government, Assistant U.S. Attorney Sagar Ravi said.
The U.S. and Argentina gave slightly different takes on how Arbizu finally arrived back in New York to face trial. A week after Argentina said it was going to extradite the former banker, U.S. District Judge Lewis Kaplan on Thursday wondered why it took years to accomplish that.
“Fill me in a little bit,” Kaplan said to Ravi. “Was there resistance to extradition?”
“The government did initiate extradition proceedings which were still pending when Mr. Arbizu agreed to surrender,” Ravi replied. “He initially surrendered to Argentine authorities and later to the U.S.”
Argentina said earlier it agreed to extradite Arbizu to the U.S. after he was arrested again on June 16 in Buenos Aires. He was to leave in the custody of Federal Bureau of Investigation agents on a June 22 flight, Argentine officials said. Argentina’s President Mauricio Macri has been attempting to improve relations with the U.S. since his election Nov. 22.
Arbizu’s lawyer Jeffrey Forman declined to comment on the circumstances of his client’s return to the U.S.
Arbizu admitted in an Argentine court in 2008 that he stole money from a UBS AG customer and replaced it with funds from a JPMorgan customer’s account, according to a 2009 civil complaint filed by the New York-based bank. He worked at UBS before joining JPMorgan, prosecutors said.
“I became a fraudster from the minute I started working in private banking, because if you think about it, I was committing fraud against Argentina as a whole through our activities here,” Arbizu, who was responsible for developing and maintaining relationships with customers in Latin America for JPMorgan, told Bloomberg in a December 2009 phone interview. “I personally committed fraud against three people, but I didn’t keep that money for myself.”
Kaplan set a Dec. 5 trial date for Arbizu.
Darin Oduyoye, a JPMorgan spokesman, declined to comment on the case. Marsha Askins, a UBS spokeswoman, didn’t immediately return a voice-mail message seeking comment.
The case is U.S. v. Arbizu, 08-cr-615, U.S. District Court, Southern District of New York (Manhattan).