Bloomberg reports that the former secretary, Karen Febles, was convicted in January 2013 of bank and wire fraud,money laundering and tax evasion and sentenced to 4 1/2 years in federal prison in July. Prosecutors said she stole more than $1.3m from Salomon, who is 99, looting his bank accounts to pay for cars, cruises, jewellery and real estate.
While the secretary’s alleged conduct was 'egregious,' Salomon’s consulting agreement with the bank can’t be read to provide 'an implied warranty that the secretary would not commit criminal acts,' New York State Supreme Court Justice Eileen Bransten said in a February 14 ruling made public today.
Salomon began working at Salomon Brothers, the investment firm founded by his father and uncles, in 1933 and served as a managing partner from 1963 to 1978. After retiring in 1981, he signed a consulting agreement that gave him an office, two secretaries and support services, according to his complaint. Citigroup, which bought the firm that became Salomon Smith Barney Holdings, assumed the contract in 1998.
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image: © Elliott Brown