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Former Citibank employee sentenced for Salomon Brothers theft

By Daniel Wiessner

NEW YORK (Reuters) - A former Citigroup Inc employee was sentenced to more than four years in prison for stealing $1.3 million from a 98-year-old former managing partner at investment bank Salomon Brothers.

U.S. District Judge William Martini on Tuesday handed the sentence to Karen Febles, 48, an executive assistant at Citibank assigned to work for William Salomon from 2000 to 2011. Salomon Brothers was absorbed by Citigroup as part of a 1997 merger.

The judge also ordered Febles to pay more than $1.1 million in restitution.

Febles' attorney did not return a call for comment. Neither did Salomon's lawyer. A spokesman for the Department of Justice declined to comment. Citibank also declined comment.

On dozens of occasions between 2005 and 2011, Febles altered the amounts on checks signed by Salomon and pocketed the difference, federal prosecutors said.

Febles spent the money on luxury cars and cruises, among other purchases, and maintained bank accounts for her young son, the prosecutors said.

A jury in federal court in New Jersey convicted Febles in January of bank fraud, wire fraud, money laundering and tax evasion for failing to pay more than $250,000 in taxes.

In a separate case, William Salomon sued Citigroup in May, claiming the company failed to properly supervise Febles as she committed "systematic theft," which he claimed totaled $3 million. That case is pending in state court in New York.

The company has said it was not responsible for the theft because Febles was acting outside the scope of her employment in handling Salomon's personal finances.

The case is United States v. Karen Febles, New Jersey District Court 2:12-cr-00406.

(Reporting by Daniel Wiessner; Editing by Noeleen Walder and Ken Wills)

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