Some local investors are finally receiving payback from banks that cheated customers in an interest-rate rigging scandal, and the money is being returned courtesy of the Pennsylvania Attorney General.

Among those getting money back are the University of Pittsburgh, which received the highest amount ($1,095,793.67), the Commonwealth of Pennsylvania Public School Employees Retirement System ($61,332.86), the Lehigh Valley Hospital Pension Fund ($24,706.38), and the Central Pennsylvania Teamsters Retirement Income Plan ($14,604.23).

To date, attorneys general from 42 states have recovered $420 million in the post-financial crisis settlement from three banks: Barclays, Deutsche Bank, and now Citibank. In total, about $10.1 million will be coming back to Pennsylvania institutions from the three banks that manipulated interest rate benchmarks.

The banks paid restitution after taking part in a widespread rigging of interest rates to suit trading positions and banks' bottom lines, instead of setting rates in a transparent manner. The interest rate, known as Libor, or the London Interbank Offered Rate, is widely used for student loans, adjustable mortgages, credit cards, and other loans, and was manipulated worldwide, cheating nonprofits, government entities, and investors in Pennsylvania and other states, the commonwealth attorney general's office said.

"Since mortgages, student loans, and other financial products often rely on Libor as a reference rate, the manipulation of Libor can and did have a major financial impact worldwide. Pennsylvania entities will receive approximately $2.4 million as a result of the settlement" with Citibank,  Attorney General Josh Shapiro said in a statement.

"Pennsylvania school districts, municipalities, and nonprofit organizations were cheated out of millions of dollars by Citibank's fraudulent manipulation of interest-rate benchmarks," Shapiro said.

Citibank and other banks misrepresented the Libor benchmark to state and local governmental, not-for-profit, private, and institutional trading counterparties by concealing, misrepresenting, and failing to disclose that Citibank made inaccurate U.S. dollar interest-rate submissions, partly to avoid negative publicity, but also to protect the reputation of the bank. Citibank's Libor submitters also pressured personnel in other parts of the bank to avoid offering higher rates and made Libor submissions that were inconsistent with their true borrowing rates in the market.

As a result of the fraud, Citibank and other banks made millions in unjust gains when government entities and not-for-profit organizations entered into swaps and other financial contracts with Citibank without knowing that Citibank and other banks on the Libor-setting panel were manipulating interest rates, the attorney general's office said. Interest rate swaps allow investors to hedge against moves in interest rates, both up and down, and Pennsylvania investors purchased these from some of the same banks that also set the rates.

Government and not-for-profit entities with Libor-linked swaps and other investment contracts with Citibank will be notified if they are eligible to receive a distribution from the multi-state settlement fund of $95 million. Citibank is the third of several banks to resolve claims following investigation by state attorneys general.

Including the Citibank settlement, the attorneys general have collected a total of $420 million in payments from the three banks, almost all of which will be distributed to state and local government entities and not-for-profits. In October 2017, Shapiro entered a similar settlement with Deutsche Bank for $220 million over its manipulation of interest rate benchmarks and in August 2016, the state attorneys general completed a $100 million settlement with Barclays Bank and Barclays Capital. Pennsylvania received $6.3 million as its share of the multi-state settlement with Deutsche Bank, and $1.4 million from Barclays.

Whether it's a bank or a student loan provider, an auto maker or a credit-reporting agency, Shapiro said, "These school districts, local governments, and others in our commonwealth will get the restitution they deserve."