Citigroup may have enabled money laundering

NEW YORK  - Citigroup (C) will pay nearly $100 million to federal authorities to settle claims that a lack of internal controls and negligence in the bank's Mexican subsidiary may have allowed customers to commit money laundering.

The Justice Department announced Monday that Citi's Banamex division will pay $97.4 million for violations of the Bank Secrecy Act.

Federal authorities alleged that, from 2007 to 2012, Banamex officials allowed more than 30 million remittances from the U.S. to Mexico worth roughly $8.8 billion. While Banamex's internal controls alerted the bank to 18,000 potentially suspicious transactions, Banamex investigated fewer than 10 of them.

Citi did not admit any fault in the settlement. Banamex USA admitted to criminal violations by "willfully failing" to maintain an effective anti-money laundering compliance program, according to the Justice Department.   

Banamex USA is an affiliate of Banamex, which Citigroup bought in 2001.    

The Federal Deposit Insurance Corporation and California regulators in 2015 ordered Banamex USA to pay a $140 million civil money penalty to resolve separate regulatory investigations.  

Citi, which previously announced it was winding down Banamex's U.S. operations, entered what's known as a "non-prosecution agreement" with authorities.

The Justice Department cited Banamex USA's remedial actions and cooperation with federal authorities as reasons the agency decided not to prosecute the unit. For one year, Citi must report to Justice any evidence or allegations of violations of money laundering rules.