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(Adds details on charges, comment from BNY Mellon)
By Nate Raymond
NEW YORK, Feb 15 (Reuters) - A former employee of a Bank of New York Mellon Corp unit was arrested on Wednesday on charges that he embezzled $7.1 million, which he used to pay for gambling debts and buy an outdoor pool, luxury cars and a gun safe.
Christopher Canale, who worked for Bank of New York's Pershing LLC unit, most recently as an accounts payable manager, was charged in a criminal complaint filed in federal court in Manhattan.
Canale, 47, was arrested in Poughkeepsie, New York, where he resides, according to a spokesman for Manhattan U.S. Attorney Preet Bharara. An attorney for Canale could not be immediately identified.
Pershing, a clearing firm unit of BNY Mellon, was not identified by name in the complaint, but BNY Mellon confirmed in a statement that Pershing was Canale's former employer. Canale was fired in September, according to court papers.
"Upon discovering Christopher Canale's conduct, we immediately terminated his employment and notified law enforcement of the fraud against our company," BNY Mellon said. "We have zero tolerance for unethical or illegal behavior."
According to the complaint, beginning in December 2013, Canale authorized $2.53 million in wire transfers to companies and people who were not pre-approved vendors, including to an unnamed individual.
In September, an employee conducting an audit of the vendor account noticed unusual wire transfers Canale had authorized to the individual, and discovered he had been making unauthorized wire transfers for years, the complaint said.
During an interview with an in-house lawyer at Pershing and several other employees, Canale admitted he had wired out $2 million to $4 million to pay for personal debts and to "save his life because of a gambling addiction," the complaint said.
He also admitted he wired funds to offshore entities and individuals in exchange for watches and jewelry, which he used to pay for his gambling debts, the complaint said.
He also admitted he used money to pay for personal credit card bills and to buy an outdoor sound system, two Mercedes cars, a pool, a gun safe and landscaping services, the complaint said.
After he was fired, Pershing continued to investigate, leading to the discovery that Canale also forged an ex-supervisor's signature to illegally cash checks intended for petty cash, resulting in $4.6 million in losses, the complaint said.
The case is U.S. v. Canale, U.S. District Court, Southern District of New York, No. 17-mj-1157. (Reporting by Nate Raymond in New York; Editing by Bernard Orr and Leslie Adler)