Citigroup under federal investigation for possible secrecy and money-laundering law violations

By Agence France-Presse
Monday, March 3, 2014 16:15 EDT
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People walk at a Citibank branch at Citibank headquarters in Manhattan on Dec. 5, 2012 in New York City [AFP]
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Banking giant Citigroup Monday said it had received subpoenas from a pair of U.S. agencies over its compliance with US bank secrecy and anti-money laundering laws.

Citi and its Banamex USA unit received a grand jury subpoena from the U.S. Attorney’s Office for the District of Massachusetts, Citi said Monday in a securities filing.

Banamex USA also received a subpoena from the U.S. Federal Deposit Insurance Corporation (FDIC) that was related to bank secrecy and anti-money laundering compliance, the Citi filing said.

Banamex USA is the US banking arm of Banco Nacional de Mexico, a leading Mexican bank Citi acquired in 2001.

“Citigroup is cooperating fully with these inquiries,” said Citi, the third-largest US bank by assets.

The security filing did not address whether the subpoenas on money laundering were connected to Citi’s disclosure last week about its discovery of fraudulent billings at Banamex.

On Friday, Citi said was cutting its 2013 earnings by about $235 million after discovering that it lost some $400 million at Banamex due to fraudulent billings by a Mexican oil services company, Oceanografia.

The investigations revealed Monday follow US regulatory action against Citi for poor oversight of anti-money laundering and bank secrecy.

Citi agreed in a March 2013 consent order with the US Federal Reserve to upgrade its bank secrecy and anti-money laundering practices to “remedy deficiencies” with compliance. The order mentioned Banamex USA.

In August 2012, Banamex USA agreed to upgrade its compliance programs in a consent order with the FDIC and the California Department of Financial Institutions.

[Image via Agence France-Presse]

Agence France-Presse
Agence France-Presse
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