Citigroup Settles Money Laundering Investigation for $100M

Bank employees at Citigroup had suspicions for years that more than $1 billion in payments being sent over 30 million transactions to Mexico through its Banamex USA division were shady. Despite ample evidence, that generated some 18,000 suspicious transaction alerts, the company only initiated 10 investigations, filing just half a dozen suspicious activity reports with federal regulators.debt defense

Now, the California-based Banamex USA has conceded it violated criminal laws for its failure to have adequate anti-money-laundering safeguards in place. For its part, Citigroup admitted it didn’t maintain adequate oversight of Banamex. For this, it will pay $97.4 million, a settlement agreement that will steer it clear of criminal charges related to the inquiry.

Miami debt defense attorneys recognize this kind of action as revealing where the priorities of bankers truly lie. While large banks like Citigroup are quick to take consumers to task – sometimes even to court –  over a few missed credit card payments or a default mortgage after a job loss or on an underwater home, they turn a blind eye to what is clearly a viable source of income for violent criminal cartels.

Prosecutors allege that even as Citigroup and its subsidiary grew rapidly to be the dominant provider of remittances from the U.S. to Mexico, there was a breakdown of protocol to detect and root out money from drugs and other illicit ventures.

In particular, these involved remittances from Mexican immigrants in the U.S. to families and loved ones in Mexico. This is not uncommon, nor is it illegal. However, one of the red flags that should have garnered Citigroup’s attention was the fact that $1.3 billion in remittances each totaled $1,500 or more  – which is five times the amount most families are sending. What’s more, while most families will get remittances from one or two sources reliably, there were examples wherein a single account holder received 1,400 payments from 950 different senders from 40 different states. There were internal alerts flagged, but at no point did the the companies send any reports of possible suspicious or criminal activity to federal regulators.

The deal is the first agreement of this nature to be made between a large bank and the U.S. Justice Department now spearheaded by Attorney General Jeff Sessions.

Our debt defense lawyers in Miami understand part of the problem was staffing. Banamex USA had just two people on staff responsible for reviewing thousands of suspicious transactions, which they did manually. Even as the bank grew larger and there were numerous concerns raised about troublesome transactions, the company failed to invest in more oversight.

Banamex USA, which Citgroup acquired back in 2001, was one of Mexico’s largest banks, and it was hoped the deal would help Citigroup capitalize on the growth of Mexico’s economy, specifically by creating a solid link between Mexican immigrants and their families. However, the subsidiary has been plagued with a number of scandals. There was the $400 million the company was defrauded of by an oil services company with a history of dealings that were questionable. Then there were findings that bank executive bodyguards in Mexico were accepting kickbacks.

It should be noted that while $100 million seems like a lot of money, consider that HSBC paid nearly $2 billion five years ago to settle a similar money laundering case under the Obama administration.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.

Additional Resources:

Citigroup Agrees to $97.4 Million Settlement in Money Laundering Inquiry, May 22, 2017, By Michael Corkery and Ben Protess, The New York Times

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Bank of America Ordered to Pay $46M in Wrongful Foreclosure Case, April 4, 2017, Miami Debt Defense Attorney Blog