Citigroup Claims $11B Lex Foundation Lawsuit Is Fraudulent

Citigroup says the $11 billion lawsuit from a mysterious money manager is the work of a “fantasist” trying to extort the bank.

As Bloomberg News reported on Friday (Oct. 8), Olgun Halil Shah, the registered director of the Lex Foundation, says that money sent to a Citigroup account in April never arrived. The foundation filed suit in the U.K. in July to recoup the money.

However, Citigroup argues that the money doesn’t exist, and says a document showing that the transfer occurred is fraudulent, as is the foundation itself. It also accuses the foundation of lying about the work it has done with the United Nations.

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Shah is “a fantasist, and the claim is part of a false and fraudulent attempt to extort vast sums from Citi,” Clifford Chance, Citigroup’s law firm, said in court papers.

“The fund was paid into a global or ‘treasury’ account operated by the defendants,” the foundation’s lawyers said in their claim. “If so, that was not done with the prior consent or knowledge of the claimant.”

Attorneys for the Lex Foundation declined to comment beyond the legal filings, Bloomberg said.

Not much is known about the foundation, according to the report. It has no website, email address and a minimal internet presence. According to its lawyers’ court filings, the foundation “manages the funding of high-value humanitarian projects on behalf of the United Nations and funds dedicated to research in science and medicine.”

But a U.N. spokesperson tells Bloomberg there was no record of the Lex Foundation on its financial tracking service database, which records humanitarian funding.

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According to Bloomberg, Shah is also the defendant in a $14 million lawsuit in London, accused by American doctor Sunil Gupta of running a fraudulent investment program.

In the Citi lawsuit, the bank’s lawyers say Shah may have sued Citi out of “ulterior motives” to “achieve an advantage in other U.K. proceedings.”