Adithya Sambamurthy, for The Bay Citizen

The Citibank branch at 451 Montgomery St.

Giuseppe Viola gave his 2008 holiday party at Trattoria Pinocchio in North Beach. It was a lavish affair, with a menu of salmon and filet mignon. Viola invited about 45 guests, and most were bankers and staff members from local branches of Citibank, according to the restaurant’s owner, Giovanni Zocca.

But Viola and Citi are no longer celebrating.

Viola, 59, is accused in court documents of running a Ponzi scheme that cost investors — including Zocca — millions of dollars, and Citi’s role in the alleged scheme has also come under scrutiny. Last week, an independent trustee appointed by the federal bankruptcy court in San Francisco filed a lawsuit charging that Citi “knowingly aided and abetted” Viola’s activities.

The suit alleges that Citibank and Viola had a close relationship. The suit also alleges that Citi skirted federal banking laws by failing to properly oversee the account.

The Federal Bureau of Investigation is also investigating Viola, and has interviewed at least one of the bankers who dealt with him for more than a decade, court records show.

“Citi is cooperating with law enforcement authorities,” said Robert Julavits, a bank spokesman. “We do not believe that Citibank acted improperly.”

Julavits said the lawsuit was “without merit.”

Viola is accused of bilking at least 60 investors out of more than $17 million over much of the past decade. He has denied in a court document that he is the same man who used a Citi trust account to funnel money that, according to former investors and the lawsuit, was acquired during convivial meetings in cafes and pastry shops in North Beach.

Adithya Sambamurthy, for The Bay Citizen

Angelo Di Pietro, right, serves lunch at Trattoria Pinocchio in North Beach

In March, Viola was arrested for skipping bail in 1990 in a separate fraud case in Arizona. He is being held in the Maricopa County Jail in Phoenix.

Citi’s “status as the world’s largest financial institution added a veneer of respectability” to Viola’s activities, the 23-page lawsuit filed in the United States Bankruptcy Court for the Northern District of California charges. It asks that Citibank be forced to return about $18 million to defrauded investors and pay punitive damages.

The lawsuit contends that Citibank continued to do business with Viola for years, ignoring irregularities in the documentation for the account and the large financial transactions as money flowed in and out.

According to former clients and court documents, Viola and his banker had an unusually close relationship.

Viola opened the Citi account in 1999 even though an internal fraud investigation had led the bank to close his previous Citi accounts held under his original name, Joseph Viola, in Arizona in 1990, court documents show. Viola, a fugitive and former convict, began calling himself Giuseppe when he arrived in North Beach in the 1990s.

With Ralph Napolitano, Viola opened an account at Citi’s office at 451 Montgomery Street with no valid personal identification, according to court documents. Napolitano was an elderly dockworker whose life savings of $220,000 made up the initial deposit. He disappeared shortly after opening the account, the lawsuit states, and is now presumed dead.

Rik Schrammel, a Citi vice president, said in a May deposition for the bankruptcy case that he had served as Viola’s banker for more than a decade. Schrammel also acknowledged that he had been interviewed by the F.B.I.

Court filings state that Schrammel was named on the Viola-Napolitano account as “successor trustee,” meaning he would oversee it should Viola be unable to do so. Such an arrangement would likely violate Citi’s conflict-of-interest rules, a Citi lawyer wrote in a 2009 e-mail message to Viola.

Schrammel was asked to resign and left Citi on April 27, he said in his deposition. He could not be reached for comment, and his lawyer said he would advise Schrammel not to talk about the case.

After the Citi account was opened, Viola ostensibly controlled it for the benefit of Napolitano, who had stated on the form to open the account that he earned $25,000 a year. The account was called the Ralph Napolitano Irrevocable Living Trust.

In May 2005, Citi asked that records from the trust be updated, according to the lawsuit. This was required by the federal USA Patriot Act of 2001, given the account’s sharply increased balance, which reached $771,000 by the end of that year.

Citi allowed Viola to sign the paperwork, even though he still had no valid identification, according to the lawsuit. A signature from Napolitano was not obtained.

By December 2005, Citi was insisting that Napolitano’s signature be included in the account-updating forms, the lawsuit states. In January 2006, the bank received a form stating that Napolitano had met personally with Schrammel. Schrammel signed and stamped the form, which was also signed by Ralph Napolitano. The lawsuit asserts that the signature of Napolitano, who had disappeared years earlier, was an “obvious forgery.”

The signatures of Napolitano and Viola when they opened a Citibank account in 1999:

Napolitano's 2005 signature was an “obvious forgery,” according to the lawsuit:

The account-update form stated that Napolitano and Viola shared a single phone number and an address at 268 Bush Street, which was actually a UPS mail drop two blocks from Citi’s Montgomery Street branch.

Until his arrest in March, Viola cashed Napolitano’s pension checks and used his credit cards. He also used a cellphone registered to Napolitano, according to John MacConaghy, the attorney representing the trustee in the bankruptcy case.

The trust account, which Citi closed last year, would ultimately take in and disburse about $17 million.

One client of Viola and Schrammel said he met with the two men in 2006 to invest about $450,000 into the Napolitano Trust. Viola was able to use a conference room at the bank to conduct business, even though he was not a Citi employee, according to that client and court documents.

“Viola took me to Citi on Montgomery Street, told me he worked through this office,” said the investor, adding that Viola and Schrammel also persuaded him to move about $360,000 from his retirement account into a Citi I.R.A. overseen by Schrammel.

“He knew everybody,” the investor said of Viola at the Citi branch. “He used the phones. He brought me into a big office on the second floor. That’s how he made me comfortable.”

In 2007, according to court documents, Milton D. Kirsch sought to move about $8 million from a bank account in Gibraltar to Citi in San Francisco. Schrammel declined the transfer, saying that Citi could not accept the money because it lacked proper documentation about its origin, the documents show.

Schrammel said in his deposition that in December 2007 he introduced Kirsch to Viola. Shortly afterward, Schrammel testified, he noticed that the Napolitano Trust received a wire transfer from Gibraltar for approximately $8 million, but Schrammel did not say anything about it to his superiors.

In July 2009, Gary Sullivan, a Citi senior vice president and assistant general counsel, notified Viola by phone and then by e-mail that the Kirsch transaction appeared inconsistent with the Napolitano Trust’s stated purpose. Sullivan informed Viola that because of this and other unusual transactions the account would be closed, court documents show.

But Citi did not actually close the Napolitano Trust until Sept. 30, 2009. During those three months, Viola took in an additional $112,000 and withdrew $912,000, essentially draining the account, court records show.

Even after the Napolitano account was closed, bank records included in the court documents show that Viola was still able to conduct business using an account he and some business partners had recently opened at Citi's North Beach branch.

This article also appears in the Bay Area edition of The New York Times.