Join the conversation:

Citigroup's Mexican subsidiary, Banamex, rocked by second fraud scandal of year

Citigroup's Mexican subsidiary, Banamex, rocked by second fraud scandal of year

Posted by Liliana Castaño on October 15, 2014

Citigroup announced Tuesday that an internal company investigation into a security unit at its Mexican subsidiary, Banamex, uncovered evidence of employees taking kickbacks from vendors, shell companies set up to look like legitimate vendors and other apparently fraudulent practices that added up to about $15 million, according to the Financial Times

While the sums are relatively small for the multinational banking giant, Citigroup CEO Michael Corbat called the behavior “appalling,” the New York Times reported

The company's finding have been turned over to federal investigators in both Mexico and the U.S.

The fraud came from personal security services that were provided to individuals outside the bank. The bank said it will use its internal security division going forward.

The security unit was originally created before in 1994, after a former Banamex president had been kidnapped and held for ransom by a guerrilla group. The group remained intact after Citigroup acquired Banamex in 2001.

This is not the first time that that financial company has been rocked by scandal in its Mexican operations.

In February, Citi disclosed that its Banamex division had lost $400 million as a result of fraud related to a Mexican oil services company called Oceanografía. The bank lent the firm the money based upon invoices that were later found to be falsified.

Link To Full Article: 

Facebook comments



Monthly newsletter featuring articles hand picked by our country managers from the best content across PanamericanWorld.



Monthly newsletter featuring articles hand picked by our country managers from the best content across the Caribbean Region on PanamericanWorld.

PANAMERICANWORLD COUNTRIES