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March 6, 2014

Citigroup Affiliate’s Troubles Multiply as Money-Laundering Subpoenas Follow Fraud

“A headache is growing for Citigroup as a banking affiliate involved in money transfers across the Mexican border has become ensnared in a criminal investigation.”

“The disclosure of the inquiry on Monday follows the bank’s admission on Friday that it had been defrauded of $400 million in a scheme involving a financially shaky oil services company in Mexico.”

“A Citigroup affiliate based in Los Angeles received a grand jury subpoena from federal prosecutors in Massachusetts related to anti-money-laundering compliance, the bank said in a securities filing on Monday. The focus of the subpoenas is unclear. The affiliate has also received a subpoena from the Federal Deposit Insurance Corporation related to its anti-money-laundering program and the Bank Secrecy Act.”

“The affiliate, Banamex USA, provides banking services to individuals and small businesses in the United States and Mexico. Until recently, it was a large player in transferring money across the border between family members, industry experts say.”

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