2 MEXICAN BANKS TO PLEAD GUILTY IN U.S. COURT

Money-Laundering Case Linked To Drug Cartels

LOS ANGELES -- With their trial just days away, two of Mexico's biggest
banks have agreed to plead guilty to laundering millions of dollars for the
Cali and Juarez drug cartels, sources close to the case said Monday.

Bancomer will pay $9.9 million in fines while Banca Serfin will pay $4.7
million as part of their separate deals with federal prosecutors in Los Angeles.

In a related development, the government has agreed to drop all criminal
charges against a third Mexican financial institution, Banca Confia, in a
civil settlement of the money laundering case.

Confia, which sold most of its assets to Citibank after it was indicted, has
agreed not to fight the U.S. government's earlier seizure of $12.1 million
from its U.S. holdings.

The sources who provided an outline of the plea agreements said a few
sticking points remain but are expected to be resolved as early as today. A
hearing has been scheduled today before U.S. District Judge Lourdes Baird to
enter the guilty pleas.

All three banks were indicted last May with more than 100 people, mostly
Mexicans, in Operation Casablanca, the Customs Service's 2 1/2-year probe of
international drug money laundering.

Twenty-two bankers from a dozen Mexican and two Venezuelan financial
institutions were allegedly involved.

When it became public, the probe set off a diplomatic firestorm as Mexican
officials complained of being kept in the dark about the cross-border
operation. Customs agents said they deliberately withheld information
because they feared a leak by corrupt Mexican law officers.

In addition to fines arising from their criminal pleas, Bancomer and Banca
Serfin face hearings before the Federal Reserve Board to decide whether they
should be barred from operating in the United States.

Under a 1992 law, any foreign bank convicted of money laundering is subject
to a mandatory license revocation hearing before the Fed.

Bancomer, with close to $30 billion in assets, is the second-largest bank in
Mexico and provides a broad range of commercial and retail banking services
throughout Mexico. It maintains offices in Los Angeles and New York and is a
partner with the U.S. Postal Service in Dinero Seguro, a program that
enables people in the United States to transfer money electronically to
relatives in Mexico from post offices here.

Banca Serfin, the third-largest Mexican bank with $16.7 billion in assets,
also offers a full range of retail and commercial banking services. It
maintains offices in New York.

After the indictments were issued, federal authorities instituted asset
forfeiture actions against the U.S. assets of all 14 Mexican and Venezuelan
banks whose employees were accused of participating in the money laundering
network.

More than $68 million was confiscated, including $16 million from Bancomer,
$12.1 million from Banca Confia and $9.5 million from Banca Serfin.

Despite the plea agreements with the banks, the trial is expected to start
Thursday against six Mexican bankers and businessmen, the remaining
defendants in this case.

Eleven defendants have entered guilty pleas while 20 more are fugitives.

In addition to the bankers' case, three separate trials are in the works
later this year for suspected members of the Cali cartel, the Juarez cartel
and four Venezuelans accused of money laundering.