MEXICO: CARTEL TRIED BANK TAKEOVER

MEXICO CITY (AP) -- In a move apparently aimed at creating a major
money-laundering operation, a top drug cartel tried to take over a small
Mexican financial group two years ago, financial regulators confirmed
Tuesday.

But the regulators said they intervened before the Juarez Cartel -- then
led by the late Amado Carrillo Fuentes -- could take control of Grupo
Finaniero Anahuac.

This is the first time that Mexican authorities have confirmed that a
drug-trafficking organization tried to assume control of a financial
institution.

The daily newspaper Reforma reported Monday that two men believed to be
linked to the Juarez Cartel tried to buy a controlling interest in the
financial group in 1995. The banking system was in turmoil following the
collapse of the peso.

The takeover wasn't completed because the National Banking and Securities
Commission took control of the bank in November 1996, citing low
capitalization levels and possible fraud against the state-run Social
Security Institute.

The links to the cartel were discovered then and authorities were notified,
said Veronica Suarez, spokeswoman for the regulatory agency.

No arrests have been made. The attorney general's office wouldn't say
whether it was investigating.

Criminal organizations have tried to take over financial institutions in
various parts of the world, said Charles Intriago, editor of the
Miami-based publication Money Laundering Alert.

``It's a convenient way to have your own built-in money-laundering
facility,'' he told The Associated Press.

But he said he was not aware of any such attempts in Mexico. He said Mexico
has tightened its laws in recent years to prevent money laundering and now
has regulations more stringent than those of the United States.

But tough laws often aren't enough. ``Of course, a lot comes in the
implementation and the enforcement,'' he said. ``That's where a lot of
countries fail.''

He said it is too early to tell whether Mexico's regulations are adequately
enforced and supervised.