On Monday, March 3, Citigroup disclosed to reporters that it and its Mexican subsidiary Banamex USA have received subpoenas from the United States attorney's office in Massachusetts. The bank has been accused of failing to adequately meet the country's anti-money laundering and anti-secrecy laws. The company told reporters about the federal investigation after it was discovered that Banamex may have been defrauded out of as much as $400 million.
The alleged fraud comes from a nearly $600 million accounts receivable program Banamex had offered to Oceanografia—a Mexico-based oil supply company—in a massive financial move. Invoices for the work that was done with Oceanografia that were supposed to be completed by Banamex management were found to have been completely falsified, according to a spokesperson for Citigroup. An insider who was familiar with the situation said that Citigroup and the government suspect a Banamex employee is behind the money laundering fraud.
Citigroup made it clear in its statement that it is cooperating fully with the federal investigation into the fraud. According to the reports, the employee who is thought to be behind the $400 million theft from the company—a junior worker—is not currently in police custody, though he has been questioned by law enforcement officials. Citigroup CEO Michael L. Corbat sent out a memo to all bank employees saying that it is currently unclear how many people were involved in this massive financial scheme.
Citigroup has faced difficulties recently, as shares fell on Monday morning by almost 2 percent, leaving the company more than 8 percent in the red on the year. It has also been revealed that Citigroup has more than $130 million in net investment in the Ukraine, which is currently embroiled in a massive international incident.
