MEXICAN BANKS GUILTY IN HIDING OF DRUG MONEY

Two of Mexico's biggest banks agreed Tuesday to forfeit millions of
dollars and pay hefty fines in a settlement over charges they
laundered money supplied by U.S. informants posing as drug
traffickers. Grupo Financiero Bancomer SA and Grupo Financiero Serfin
SA will each pay $500,000 in criminal fines. Bancomer also will
forfeit $9.4 million seized by authorities. Serfin will forfeit about
$4.2 million.

Attorneys for each bank entered guilty pleas to one count of money
laundering during a hearing before U.S. District Judge Lourdes Baird
in Los Angeles. The banks also were sentenced to three years of
probation, conditioned upon paying the fines and keeping agreements to
assist in the prosecution of individuals charged in the case and
develop anti-laundering programs. [N510]

Posted at 7:58 p.m. PST Tuesday, March 30, 1999

Mexican banks plead guilty in drug money case

BY MICHAEL WHITE
Associated Press

LOS ANGELES -- Two of Mexico's biggest banks agreed Tuesday to forfeit
millions of dollars and pay hefty fines in a settlement over charges
they laundered money supplied by U.S. informants posing as drug
traffickers.

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

Attorneys for each bank entered guilty pleas to one count of money
laundering during a hearing before U.S. District Judge Lourdes Baird.

The banks also were sentenced to three years probation, conditioned
upon paying the fines and keeping agreements to assist in the
prosecution of individuals charged in the case and develop
anti-laundering programs.

Prosecutors planned to drop charges against a third Mexican financial
institution, Banca Confia. Confia, which sold most of its assets to
Citibank after it was indicted, agreed to forfeit $12.1 million seized
from its U.S. holdings.

``The guilty pleas represent not only the culmination of the
government's efforts to hold the banks responsible for the past
conduct of their employees, but also signify the government's success
in ensuring the banks join us in our efforts to combat money
laundering,'' said U.S. Attorney Alejandro N. Mayorkas.

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.

46ederal prosecutors say tens of millions of dollars were laundered
through phony transactions to Mexican-owned banks.

The money was supplied to the banks through a government informant and
undercover U.S. Customs Service agents operating out of a storefront
in Santa Fe Springs, Calif.

The bankers were told, usually as they visited Santa Fe Springs, that
the money came from Colombia's Cali drug cartel. The sting operation
also included a former member of Mexico's Juarez cartel who helped
recruit the bankers, according to court documents.

Assistant U.S. Attorney Julie Shemitz told Baird that the laundering
activities were carried out by branch-level employees without the
knowledge of upper management.

A statement issued by Serfin described the plea as ``a proper business
decision.''

``Banca Serfin has acknowledged responsibility for the conduct of a
former employee,'' the statement said.

Bancomer officials and attorneys declined to comment.

The pleas didn't end the government's case. Jury selection started
Monday for six Mexican bankers and businessmen charged in the case.
Prosecutors also are working out a civil settlement with Banco
Industrial Venezuela, one of two Venezuelan banks implicated. Other
civil actions may be filed.