The Wall Street Journal is reporting that multiple agencies are investigating Citigroup on continuing counts of fraud. Previously, the company had been involved in a case where $400 million was fraudulently loaned to an oil supply company in Mexico. Now, as attention narrows on its activities, another instance of alleged fraud in Mexico has been discovered.
According to the source, this latest event involves a loan to a Mexican oil supplier that works for energy company Petróleos Mexicanos, or Pemex. At just under $30 million, this second allegation of fraud involves less money than the previous case, but it is still a high priority.
The FBI isn't the only organization looking into this. The New York Times also notes that Mexico's law enforcement has been collaborating with Citigroup in processing this case. This includes investigating Oceanografia, a separate supplier that works for Pemex, which was involved in the previous case.
The Times featured quotes from the CEO of Citigroup, Michael Corbat, who said that the perpetrators will be tracked in an attempt to reimburse the wronged parties.
"All will be held equally responsible and we will make sure that the punishment sends a crystal-clear message about the consequences of such actions," he said.
In addition, the Washington Post quoted Corbat from an earnings call claiming that one employee had already been dismissed from Citigroup, and that "anyone else we find to have been criminally involved will be fired."
The nature of this investigation speaks to the complexity of these types of situations, where thorough review is often needed to identify risks and potential for fraudulent activity ahead of time.
