INVESTIGATION: THE FIRMS ARE ACCUSED OF LAUNDERING MILLIONS IN NARCOTICS
MONEY FOR TWO CARTELS

Washington-a federal grand jury in Los Angeles charged three Mexican banks
and more than two dozen Mexican bankers Monday with laundering millions of
dollars in drug profits for the Cali cartel of Colombia and the Juarez
cartel of Mexico.

The indictments - capping a three-year investigation said to be the largest
such case in U.S. history - were announced by Treasury Secretary Robert
Rubin and Attorney General Janet Reno. It was the first time Mexican banks
and bank officials were directly linked to laundering U.S. drug proceeds,
officials said.

Charged were Bancomer and Banca Serfin, Mexico's second-and third-largest
banks, and Banca Confia, a smaller institution recently purchased by
Citibank. Both Bancomer and Banca Serfin have branches in New York and Los
Angeles and could face sanctions by U.S. regulators. The Federal Reserve
Board said it was filing civil actions against five banks with branches in
the United States.

Dubbed "Operation Casablanca," the U.S. Customs Service investigation
resulted in 130 arrests, including 22 officers of 12 major institutions.
Some were lured to the United States to party at a Nevada casino, while
others were invited to a conference on money laundering in San Diego.
Others were still at large.

The investigation's undercover agents posed as middlemen between the
cartels and the Mexican bankers, who agreed to launder the funds through
phony accounts for a fee of 4 percent or 5 percent. Officials said they
seized $35 million, 2 tons of cocaine and 4 tons of marijuana.

Response was slow to come from Mexico, as officials there did not learn of
the probe until Monday.

"This is not a systemic practice," said Carlos Gomez y Gomez, president of
the Mexican Bankers Association. He said any crimes were committed by
"individuals."

Checked-by: Mike Gogulski