United States prosecutors accused Citigroup of being the bank of choice, allegedly, for drug trafficking networks, due to the perception of lax fraud controls, as reported in the Financial Times this Monday.
The indictment unsealed last week highlights the methods used by two California residents, allegedly linked to the Sinaloa cartel, to launder tens of thousands of dollars through Citigroup ATMs.
According to the indictment, Guillermo Zambrano and Luis Belandria-Contreras, under the pretext of a legitimate banking activity, deposited almost 36 thousand dollars (33 thousand euros at current exchange rates) in cash in the machines Citi machines. The deposits, made on three separate occasions in January 2021, were carefully structured to avoid detection. The pair allegedly split the large sum into smaller increments of a few hundred dollars each, with mere minutes between transactions, ensuring that each deposit stayed below the $10,000 (9,000 euros) limit required by US authorities. Despite the allegations, both Zambrano and Belandria-Contreras declared themselves innocent.
The Drug Enforcement Administration (DEA) associated the two men with a criminal network responsible for laundering more than 46 million euros in fentanyl and methamphetamine proceeds across the United States. The DEA revealed to the Financial Times that the suspects deliberately chose Citigroup after evaluating several banks, considering Citi “more favorable” due to its apparent lack of anti-money laundering (AML) measures.
Citigroup refrained from commenting on the specifics of the case, citing confidentiality in communicating transactions. However, the bank underlined its commitment to adopting sound AML policies.
Police authorities have long warned of the evolution of drug traffickers’ tactics in laundering money through legitimate financial institutions.
In 2012, HSBC was fined 1.76 billion euros by the US Department of Justice for failing to prevent money laundering by Mexican cartels.
Citigroup, also known as Citi, is a global financial services company headquartered in New York City. Founded in 1998, it operates in more than 160 countries and jurisdictions, offering a wide range of financial products and services, including consumer banking, credit, corporate and investment banking, securities brokerage and wealth management.
