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Monday, 3 March 2014

Citigroup Discloses Money-Laundering Subpoenas

New York Times

Citigroup and its Mexican subsidiary have received grand jury subpoenas from federal prosecutors over issues of compliance with anti-money-laundering and bank secrecy laws, the bank disclosed on Monday.

The disclosure in the bank’s annual securities filing comes after Citigroup said its Mexican unit Banamex had been defrauded of as much as $400 million.

The grand jury subpoenas were issued by the United States attorney’s office in Massachusetts.

Banamex USA also received a subpoena from the Federal Deposit Insurance Corporation related to the Bank Secrecy Act and anti-money-laundering program, Citigroup said.

The purported fraud stems from a $585 million accounts receivable program Banamex had offered to an oil supply company, Oceanografia, in Mexico. Invoices for work Oceanografia was supposed to have completed were falsified, according to Citigroup. A person briefed on the matter said it was suspected that a Banamex employee was involved in the fraud.

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