2 MAJOR BANKS AGREE TO PLEAD GUILTY TO LAUNDERING DRUG MONEY

MEXICO -- Two of Mexico's biggest banks agreed to plead guilty Tuesday to
laundering millions of dollars in drug money in a case that has strained
relations between the United States and its southern neighbor, a source said.

Grupo Financiero Bancomer S.A. and Grupo Financiero Serfin S.A. will each
pay $500,000 in criminal fines. Bancomer also will forfeit about $9.4
million in money seized by authorities. Serfin will forfeit about $4.2
million in seized money, according to a source.

U.S. prosecutors planned to drop charges against a third Mexican financial
institution, Banca Confia.

The money is part of $100 million seized from 14 banks and dozens of
individuals in Operation Casablanca, a three-year investigation of money
laundering activities of Colombia's Cali drug cartel and the Juarez cartel
in Mexico.

Federal prosecutors say tens of millions of dollars in drug profits were
laundered through phony transactions to Mexican-owned banks to conceal
their origin. The banks had denied wrongdoing, saying any illegal activity
was committed by rogue employees.

Attorneys for Bancomer and Serfin were scheduled to enter pleas in a
hearing before U.S. District Judge Lourdes Baird in Los Angeles. The
operation raised tension between the U.S. and Mexico when agents arrested
167 people, including top Mexican bankers and executives. Mexico accused
the U.S. of intruding on Mexican sovereignty by conducting a sting
operation without its involvement.