MEXICO BANKS PLEAD GUILTY IN US TO LAUNDERING MONEY

LOS ANGELES, - Two of Mexico's
largest banks pleaded guilty in a U.S. court on Tuesday to laundering
money for the Cali and Juarez drug cartels in what federal authorities
called the largest such case in U.S. history.

Bancomer and Banca Serfin each pleaded guilty to one charge of money
laundering in a plea agreement that averted the need for a trial,
scheduled to start in federal court in Los Angeles on Tuesday.

"This is a milestone in our efforts to combat the laundering of
narcotics proceeds through financial institutions," said U.S.
Attorney Alejandro Mayorkas.

"By pleading guilty to money laundering the banks have acknowledged
full responsibility for the fact that their employees knowingly
laundered drug money," he added.

Under an agreement with U.S. prosecutors, Bancomer will pay a fine of
$500,000 and forfeit $9.5 million in money that was seized by federal
agents after the "Operation Casablanca" sting in 1998. Banca Serfin
will pay a $500,000 fine and forfeit $4.7 million.

Prosecutors said a third Mexican bank, Banca Confia, whose assets were
recently purchased by Citibank, has agreed to a civil resolution in
which it will not admit criminal guilt but will forfeit $12.2 million
seized by U.S. agents.

The pleas stem from the controversial "Operation Casablanca"
investigation of what federal authorities called the largest money
laundering case in U.S. history.

The three-year undercover probe ended in May 1998 when bankers
suspected of laundering drug money were lured to a fake casino in the
United States.

"Casablanca" resulted in more than 150 arrests and the seizure of $50
million worth of assets. Ultimately, three banks and 36 individuals
were indicted on charges of laundering profits generated by Colombian
and Mexican drug traffickers working for the Cali and Juarez cartels.

The sting strained relations between the United States and Mexico
because Mexican officials were not told about the investigation until
it was over.

During pretrial arguments, lawyers for the banks claimed that any
wrongdoing was undertaken only by low-level employees and went
undetected by their superiors.

A spokesman for Banca Serfin said its plea on Tuesday was "a proper
business decision and in the best interests of Banca Serfin's
shareholders, customers and employees."

The spokesman added that Banca Serfin "has acknowledged responsibility
for the conduct of a former employee who improperly circumvented and
violated bank policies and procedures." The spokesman said the bank
has put in place new security measures.

Still expected to stand trial are six Mexican bankers, businessmen and
stockbrokers who were indicted in May 1998. Eleven other defendants
have pleaded guilty to charges stemming from the operation, and others
are still at large.