NEW YORK, N.Y. – Citigroup and affiliate Banamex USA have disclosed grand jury subpoenas concerning compliance with the Bank Secrecy Act and anti-money laundering requirements under federal laws and banking regulations.
Citigroup Inc. said in a regulatory filing on Monday that the bank and Banamex USA received subpoenas from the U.S. Attorney’s Office for the District of Massachusetts. Banamex USA also received a subpoena from the Federal Deposit Insurance Corp.
Citi says it is co-operating fully with the inquiries.
On Friday, Citi announced that it lowered its 2013 earnings by $235 million, saying it was a victim of fraud committed by Mexican oil services company Oceanografia S.A. de C.V., or OSA. Citi said that OSA overstated by $400 million the business it was doing with Mexico’s state-owned oil company Petroleos Mexicanos, or Pemex. OSA used falsified invoices as collateral for $585 million in loans from Banamex, Citigroup said. But after an investigation, Citigroup could only verify $185 million of invoices.
Citi said that it believes the case is isolated, and it is moving to recover the money and identify anyone involved in the fraud. Mexican authorities said they have taken control of OSA, in part, to help make sure Citi recoups the funds.
Shares of Citigroup fell 95 cents to $47.68 in afternoon trading.