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In today's environment, the government has never more aggressively regulated, investigated, pursued and prosecuted white collar crime. If you or your company becomes embroiled in any type of federal or state government investigation, you need experienced trial lawyers who have gone toe-to-toe with prosecutors and government agents.

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    U.S. to Banamex USA: Only 10 Investigations into 18,000 Banking Alerts is Absurd

    Last week, the U.S. Department of Justice announced a non-prosecution agreement (“NPA”) between Banamex USA, a California bank with significant operations in Mexico, related to alleged U.S. Bank Secrecy Act (“BSA”) violations.  The government’s investigation, which took place over the past several years, revealed that Banamex USA willfully failed to employ sufficient controls to prevent money laundering and willfully failed to file Suspicious Activity Reports related to questionable banking transactions.  The United States claimed Banamex USA processed over 30 million payments to Mexico worth more than $8.8 billion.  Despite this volume, Banamex USA conducted less than 10 investigations into questionable transactions although its monitoring system issuing over 18,000 alerts from 2010 to 2012.  In the NPA and the associated factual stipulations, Banamex agreed to the violations as well as to the forfeiture of $97 million and other remedial measures.

    The NPA follows several years of legal concerns regarding Banamex USA.  Last week’s DOJ press release also referenced the FDIC’s June 2015 assessment of a $140 million penalty for Banamex USA’s failure to implement an effective BSA/AML compliance program.  The combined penalties from the FDA assessment and the recent DOJ forfeiture is roughly $237.44 million.

    Also, as covered by White-Collared  in March 2014 (here), $585 million in fraudulent accounts receivable loans made by Banco Nacional de Mexico, Banamex USA’s affiliate in Mexico, led their corporate parent, Citigroup, Inc., to downwardly adjust its 2014 financial results.  Of the $585 million received by the borrower, Oceanografia S.A. de C.V., only $185 million was backed by actual accounts receivables.  The 2014 announcement coincided with Citigroup’s annual filing which – in an ironic turn of events – disclosed that Banamex received subpoenas from the FDIC and DOJ regarding compliance with the U.S. Bank Secrecy Act and other AML requirements.

    The link to the DOJ press release and the NPA can be found here and here, respectively.

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