Citigroup faces criminal probe for fraud at Mexico unit: Source

Tags: Citigroup, News
Federal authorities have opened a criminal investigation into a $400 million fraud involving Citigroup's Mexican unit, according to a person familiar with the matter.

Citigroup disclosed in February it had discovered at least $400 million in fraudulent loans in its Mexico subsidiary, Banco Nacional de Mexico, known as Banamex, and said employees may have been in on the crime.

The bad loans were made to Mexican oil services company Oceanografia, a contractor for Mexican state-owned oil company Pemex.

The New York Times first reported the criminal inquiry.

The investigation, overseen by the FBI and prosecutors from the United States attorney's office in Manhattan, is focusing on whether holes in Citigroup's internal controls contributed to the fraud in Mexico, the newspaper reported.

The FBI and prosecutors are questioning whether Citigroup was equal parts victim and enabler, the newspaper said.

Representatives of the U.S. attorney's office in Manhattan and Citigroup declined comment. The FBI did not immediately respond to a request for comment.

Reuters reported in February that the U.S. Federal Bureau of Investigation was aware of Citigroup's loan losses due to fraud by a Mexican company and was monitoring the situation for possible criminal activity.

Banamex fired two bond traders after uncovering rogue trading last year, two sources close to the matter told Reuters on Tuesday, raising fresh questions over what controls the troubled unit had in place to police employees.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • RBI and government intervention is vital if all Indians are to have homes by 2022

    There is a strong case for interest subvention for India’s real estate sector.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

Public perception on climate change

Climate change is already happening; however, surveys conducted in 2008 ...

Parvez Imam

The absoluteness in representations

When a representation replaces the original object or subject, a ...

Dharmendra Khandal

Religion and conservation must go hand in hand

In 1986, former president of WWF International, HRH Prince Philip, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture