Justice Department investigation into Banamex expands
The US Justice Department is reportedly expanding its investigation of Citigroup's money-laundering controls to look into the bank's dealings with Mexican billionaire Carlos Hank Rhon; US officials asked Citigroup to provide information on accounts tied to four businesses affiliated with Rhon. The government has asked Banamex for less-detailed information on about a dozen other companies, including the Mexican units of US retailers Costco Wholesale and Home Depot, American Express, and HSBC Mexico; these are merely to check if the bank has been conducting sufficient due diligence work. More details requests were made concerning accounts linked to money-transfer businesses, such as Western Union, and Citigroup's monitoring of those transactions.
According to recently obtained legal documents, the Justice Department has been investigating Citigroup’s dealings with banks owned by Mexican billionaire Carlos Hank Rhon as part of a wider probe into money laundering at the megabank.

U.S. officials asked Citigroup to give them a variety of information on accounts related to four businesses owned with Hank Rhon, on the basis of legal documents seen by Bloomberg. The banks in question are owned by Grupo Financiero Interacciones SA and Grupo Hermes SA, which are controlled by Hank Rhon.

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Of note, the DoJ has also requested that Citigroup cough up related documents for a fifth firm, Banco Monex (not related to Hank Rhon), for a number of money-transfer businesses, as well as information on transactions with more than 10 other firms.

A subpoena and other filings related to the case make it clear the DoJ is taking a closer look anti-money laundering practices at Citigroup’s Banco Nacional de Mexico (formerly known as Banamex), and probing if some of its clients were involved in money laundering.

A spokesman for the Carlos Hank Rhon business empire noted the banks in question weren’t the targets of the investigation, and that neither Hank Rhon nor any of his firms have been accused of any legal violations.

A Justice Department spokesman would not comment on this story.

More on DoJ investigation of Citigroup for money laundering

Two of the firms listed in the DOJ subpoena (Interacciones Casa de Bolsa SA and Aseguradora Interacciones SA) are brokerage and insurance units of Grupo Financiero Interacciones, which is controlled by Hank Rhon and family.

The other two firms noted in the subpoena (Cerrey SA and Cerrey USA) are divisions of Latin America’s largest maker of steam generators. Cerrey is owned by Grupo Hermes, founded and managed by Hank Rhon.

Of interest, the Justice Department first requested that Mexican regulators deliver the subpoena to Citigroup’s Banamex unit in Mexico back in January, requesting the documents as part of an investigation that began with Banamex USA.

The subpoena demands information relating to signature cards, account paperwork, “know-your-customer” risk assessments, account ledger cards and correspondence such as e-mails, electronic messages and memos regarding the accounts. The DoJ is requesting similar documentation from Banco Monex. The agency is also requesting Banamax provide less detailed data on around another dozen accounts.