Citi Uncovers New US$15m Fraud in Banamex Unit The Business Times
go to original October 14, 2014

MEXICO CITY - Citigroup Inc said on Tuesday it uncovered a US$15 million fraud at Banamex, its troubled Mexican bank, related to a private security services company the bank operated.

The company, originally set up only to protect Banamex's board members and their families, was found to have been offering its services to third parties, a person familiar with the investigation said. The fraud related to expense claims submitted by the company, the person added.

The loss is the latest of a string of problems at Banamex. Citigroup said in February it uncovered at least US$400 million in fraudulent loans that Banamex made to Mexican oil services company Oceanografia. That figure has since increased to more than US$500 million.

The Mexican unit fired two bond traders after uncovering rogue trading last year and taken writedowns related to bad loans to Mexican homebuilders extended in the last few years.

Banamex USA is facing a US criminal investigation involving possible violations of money-laundering laws, a source has told Reuters.

Read the rest at The Business Times

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