Citigroup is no stranger to scandals that force Mike Corbat to write out novelty-sized checks to assorted federal agencies. And Citi’s Mexican unit, Banamex, has been causing it gastrointestinal problems since it swallowed it whole back in 2001. First, it got swindled out of $400 million. Then, its American unit got hit with a $140 million fine for money laundering—leading Citi to decide to shut the whole thing down. But not before one more payout, this time to the Justice Department.
Still, things could be—and have been—worse. Perhaps Attorney General Jeff Sessions was taking into account the earlier money-laundering fine levied by those communists in California and at the Federal Deposit Insurance Corp., or the fact that Mexico isn’t under U.S. sanctions, or the fact that Citigroup is not a small-time drug dealer (it merely looked the other way when large-scale drug dealers were washing dollars through it). Whatever it was, the soon-to-expire Banamex merely had to admit to “criminal violations”—not the same as a guilty plea!—and pay $97.4 million, a rounding error compared to earlier fines for things like inadvisable uses of an emoticon and funny stuff with rates and mortgages.
From 2007 to 2012, Banamex USA generated about 18,000 internal alerts of suspicious transactions among the 30 million Mexico remittances it processed, prosecutors said.
Yet the bank conducted fewer than 10 investigations and filed only six suspicious activity reports with regulators….
One of the biggest problems was staffing. The bank had only two people assigned to review the thousands of suspicious transactions manually. Even as the bank grew and employees raised questions about the problematic transactions, Banamex USA did not invest in more oversight, the prosecutors said.