Citigroup’s Mexico Unit Faces Widening U.S. Money-Laundering Probe

A police guard stands outside one of the Banamex Bank branches on Avenida Reforma in Mexico City. (Susana Gonzalez/Bloomberg)
A police guard stands outside one of the Banamex Bank branches on Avenida Reforma in Mexico City. (Susana Gonzalez/Bloomberg)

By Alan Katz and Dakin Campbell / Bloomberg

The U.S. Justice Department is investigating whether Citigroup Inc. let customers move illicit cash through its Mexico unit, setting the bank’s biggest international operation in the path of an expanding money-laundering probe.

The Justice Department subpoenaed Banco Nacional de Mexico, known as Banamex, demanding information about its anti-money-laundering controls and seeking documents about its due diligence on operations involving hundreds of clients, according to documents reviewed by Bloomberg.

The subpoena, which was sent in January but hasn’t been reported or disclosed by the bank, expands a Justice Department investigation previously known to focus only on a small U.S. unit. It shows investigators are looking into a Mexico operation that accounts for about 10 percent of the New York-based company’s core revenue, and has about 1,500 branches — almost twice as many as Citigroup has in the U.S.

Banamex, which is wholly owned by Citigroup, is already under U.S. investigation over alleged loan fraud against the bank. Citigroup separately said it shut down a unit of Banamex security guards last year after uncovering fraud there.

http://www.bloomberg.com/news/articles/2015-07-24/citigroup-s-mexico-unit-faces-widening-u-s-laundering-probe

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