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April 15, 2014

Mexico bank regulator, Citigroup report second fraud at Banamex

“Citigroup and Mexico’s bank regulator on Monday said they uncovered a second fraud at Citi’s local unit Banamex, as part of a wider investigation following the discovery in February of fraudulent loans to oil services company Oceanografia.

“Mexico’s National Bank and Securities Commission (CNBV) said the investigation found another company with under $30 million in fraudulent loans.

“Citigroup (C.N) in February said it found $400 million in bad loans at Banamex, Mexico’s No.2 bank by assets, made to Oceanografia and backed by apparently fraudulent invoices to state-owned oil company Pemex.

“Citi, in the course of reviewing over $14 billion in financing, found a second company that had also received loans backed by Pemex receivables that had “similar issues” to Oceanografia, Chief Financial Officer John Gerspach said on a call discussing the bank’s first-quarter results.”

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Read full Reuters article here.

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