Thread: Citigroup Will Close Banamex USA, Pay $140 MILLION for Money Laundering

Citigroup Will Close Banamex USA

Bank will pay regulators $140 million over unit’s money-laundering controls

ENLARGE
Citigroup said that Banamex USA hadn’t generated consistent earnings. PHOTO:AGENCE FRANCE-PRESSE/GETTY IMAGES


By CHRISTINA REXRODE
Updated July 22, 2015 3:29 p.m. ET0 COMMENTS

Citigroup Inc. on Wednesday confirmed that it will close Banamex USA, a small unit doing business across the U.S.-Mexico border, and agreed to pay $140 million to regulators who said the unit hadn’t done enough to protect itself from money launderers.

The decision ends a chapter for the three-branch unit that has been a relatively large headache for the bank, mainly because of concerns about its anti-money-laundering practices. However, the unit is still being examined by other regulatory agencies, including the Treasury Department’s Financial Crimes Enforcement Network.

READ MORE

• Citigroup Likely to Close Banamex USA (May 31)
• Citigroup Profit Soars on Lower Litigation Costs (July 16)

The regulators who levied the new fine, the Federal Deposit Insurance Corp. and the California Department of Business Oversight, had previously filed a consent order against Banamex USA in 2012, telling it to beef up staff and systems designed to detect dirty money. The bank at the time agreed to make changes but didn’t pay a fine.

Regulators on Wednesday said Banamex USA hadn’t done enough to comply with the 2012 order, saying the bank didn’t have enough staff on hand or provide enough training to those responsible for catching money launderers. The FDIC also said that the bank hadn’t retained a “qualified and knowledgeable” officer to be in charge of whether the bank complied with related government requirements.

“Three years ago Banamex USA made a commitment to correct numerous weaknesses in its anti-money-laundering program,” said Tom Dresslar, spokesman for the California regulatory agency. Mr. Dresslar said that over time the agency found “serious, sometimes new, problems.”

Banamex USA largely serves customers who need to move money across the border frequently, such as U.S. citizens who live in Mexico. Such businesses offer banks the chance to capitalize on a fast-growing market, but also one where money laundering is seen as an elevated risk.

Citigroup didn’t admit or deny wrongdoing, but said it was “committed to devoting the resources and expertise needed to continuously execute a robust and comprehensive” anti-money-laundering program. The bank did make numerous changes after the 2012 order, including ousting Banamex USA’s top deputies, closing branches and bringing in consultants.

Citigroup’s decision to shut down Banamex USA was its own and not something that regulators demanded, according to people familiar with the settlement negotiations. Citigroup said that Banamex USA hadn’t generated consistent earnings and that shutting it down was part of the bank’s overall mission of becoming smaller and simpler.

Even so, disputes with other regulators are still looming, including information requests from FinCEN, and grand-jury subpoenas from the U.S. attorney’s office of Massachusetts, according to bank filings.

The Wall Street Journal has reported that the Justice Department is examining whether Banamex USA failed to alert the government about suspicious banking that in some cases involved suspected drug-cartel members.

The Journal had also previously reported that Citigroup planned to shut down Banamex USA.

Banamex USA has just three branches, down from a peak of 11: in Houston, San Antonio, and in its headquarters of Century City, Calif. Citigroup plans to close the Houston and San Antonio branches in October. The Century City branch will remain open throughout the wind-down process, and the bank expects the bulk of that work to take about a year.

Citigroup said it would work with Banamex USA’s 300 employees to help them look for jobs both within Citigroup and elsewhere.

Banamex USA deposits will be returned to customers, not automatically transferred to Citigroup.

Write to Christina Rexrode at christina.rexrode@wsj.com

http://www.wsj.com/articles/citigrou...usa-1437585140

11/9/14

http://www.alipac.us/f12/u-s-banks-c...counts-314212/

How come we always hear about these supposedly large fines, but nothing about the prosecution and prison sentences of the corporate decision makers? As we've all heard before, these corporations just consider fines the cost of doing business. If we ever expect to see any real change, individuals directly responsible for the crime need to be sent to the big house!

If you put people in prison the taxpayers are stuck paying for the investigation, the prosecution, their transportation, food, clothes, medical care etc.

If you fine the company the government gets reimbursed for the investigation and turns a nice profit on it.

Companies will give a lot of money to keep their CEO and other top people out of prison and keep the company turning a profit (and paying taxes) and all of their employees working (and paying taxes.) And keep the stockholders happy and making money. (And paying taxes.)

If you destroy the company all of the employees lose their jobs (and stop paying taxes), and the shareholders lose their money (and stop paying taxes)

IT'S ALWAYS ABOUT THE MONEY.

Originally Posted by JohnDoe2

If you put people in prison the taxpayers are stuck paying for the investigation, the prosecution, their transportation, food, clothes, medical care etc.

If you fine the company the government gets reimbursed for the investigation and turns a nice profit on it.

Companies will give a lot of money to keep their CEO and other top people out of prison and keep the company turning a profit (and paying taxes) and all of their employees working (and paying taxes.) And keep the stockholders happy and making money. (And paying taxes.)

If you destroy the company all of the employees lose their jobs (and stop paying taxes), and the shareholders lose their money (and stop paying taxes)

IT'S ALWAYS ABOUT THE MONEY.

So are you suggesting fines instead of individual prosecution is going to solve the problem? I would disagree 100%! Those individuals guilty of a crime need to be punished according to law. That's one of the problems with our country today ......... failure to hold folks responsible and accountable for their actions.

Don't forget that city, county state and federal governments have no money other than what they take from people and companies as taxes, fines and fees.

Their goal is to keep the money coming in.

Putting people in prison doesn't keep the taxes, fines and fees coming in.

Their goal is different from wanting to hold people accountable.

I'm not saying that is the way it should be.

I'm saying that is the way it is.

Originally Posted by MW

So are you suggesting fines instead of individual prosecution is going to solve the problem? I would disagree 100%! Those individuals guilty of a crime need to be punished according to law. That's one of the problems with our country today ......... failure to hold folks responsible and accountable for their actions.

Money laundering is a new crime. The first laws passed about it were passed in 1970 as part of the failed "War on Drugs". These laws haven't curtailed the illegal drug trade. These laws haven't accomplished anything positive for our nation or our people. Quite the reverse, they have in the course of enforcing these laws against drug dealers and other illegal enterprises stomped on the privacy rights of all Americans.

In my opinion, we should end the War on Drugs, legalize and regulate the business, make it a US-Citizen-only owned and operated domestic-only (no imports, no exports) business from A to Z, tax it under the FairTax, and use part of the tax proceeds only drug usres pay to better educate our people about the real risks and consequences of using drugs and provide free rehab on demand without stigma for anyone who wants or needs it.

These money-laundering laws do not benefit the US or our citizens, instead they harm both. Why do we care if drug money sucked out of our economy by illegal enterprises finds its way back into our banking system and money supply? We don't. To care would be too stupid to believe. Ironically, while sounding good on the surface, money laundering laws weren't designed to benefit the US or the American People, they were designed to help foreign governments keep the money their people earn in foreign illegal drug and other illicit sales in the US in their own country in their banks while giving authority to our government to spy on Americans through their banking transactions.

When you stand back and look at some of these laws like anti-drug laws and their related anti-money laundering laws, you see the motive for these laws were not for US, they were for the benefit of foreign governments, foreign interests and foreign persons. I mean why would our government want to prevent money taken illegally out of our economy from finding its way back home into our banks
where it belongs?

Also, like the income tax, anti-money laundering laws were first passed by Democrats when they controlled the US Congress.

I'm no fan of Citigroup, but I see no benefit to our country of anti-money laundering laws and believe they should all be repealed so freedom and privacy can be restored to our private banking system.

Judy wrote:

I'm no fan of Citigroup, but I see no benefit to our country of anti-money laundering laws and believe they should all be repealed so freedom and privacy can be restored to our private banking system.

Sometimes you just amaze me, Judy. So are you actually suggesting we aid the drug cartels by allowing U.S. banks to profit from the cleaning of illegally obtained drug money?

12/1/14

http://www.alipac.us/f19/some-banks-...border-315395/

Originally Posted by MW

Sometimes you just amaze me, Judy. So are you actually suggesting we aid the drug cartels by allowing U.S. banks to profit from the cleaning of illegally obtained drug money?

This is what I suggested:

Money laundering is a new crime. The first laws passed about it were passed in 1970 as part of the failed "War on Drugs". These laws haven't curtailed the illegal drug trade. These laws haven't accomplished anything positive for our nation or our people. Quite the reverse, they have in the course of enforcing these laws against drug dealers and other illegal enterprises stomped on the privacy rights of all Americans.

In my opinion, we should end the War on Drugs, legalize and regulate the business, make it a US-Citizen-only owned and operated domestic-only (no imports, no exports) business from A to Z, tax it under the FairTax, and use part of the tax proceeds only drug usres pay to better educate our people about the real risks and consequences of using drugs and provide free rehab on demand without stigma for anyone who wants or needs it.

These money-laundering laws do not benefit the US or our citizens, instead they harm both. Why do we care if drug money sucked out of our economy by illegal enterprises finds its way back into our banking system and money supply? We don't. To care would be too stupid to believe. Ironically, while sounding good on the surface, money laundering laws weren't designed to benefit the US or the American People, they were designed to help foreign governments keep the money their people earn in foreign illegal drug and other illicit sales in the US in their own country in their banks while giving authority to our government to spy on Americans through their banking transactions.

When you stand back and look at some of these laws like anti-drug laws and their related anti-money laundering laws, you see the motive for these laws were not for US, they were for the benefit of foreign governments, foreign interests and foreign persons. I mean why would our government want to prevent money taken illegally out of our economy from finding its way back home into our banks
where it belongs?

Also, like the income tax, anti-money laundering laws were first passed by Democrats when they controlled the US Congress.

I'm no fan of Citigroup, but I see no benefit to our country of anti-money laundering laws and believe they should all be repealed so freedom and privacy can be restored to our private banking system.