Two of Mexico’s biggest banks pleaded guilty to criminal charges Tuesday as they were about to go on trial in connection with Operation Casablanca, the U.S. Customs Service’s massive probe of international drug money laundering.
In a plea bargain negotiated with prosecutors and ratified by U.S. District Judge Lourdes Baird, Bancomer and Banca Serfin were fined $500,000 each and ordered to forfeit a total of $13.6 million in assets.
A third Mexican bank indicted in the case, Banca Confia, was dropped as a criminal defendant after agreeing to forfeit $12.2 million. Sources close to the case said the evidence against Confia was substantially weaker than against the other two banks.
The three banks were indicted last May along with 112 individuals, mostly Mexican, after a 2 1/2-year investigation in which customs agents posed as money launderers for the Cali cartel.
Aided by an informant with past drug syndicate ties, the agents targeted the U.S. money laundering operations of the Cali and Juarez cartels.
Working out of a warehouse front in Santa Fe Springs, they ultimately were able to execute a sting that prosecutors said implicated 22 bankers from a dozen Mexican banks, including the three financial institutions indicted.
In their plea agreements, Bancomer and Banca Serfin expressed regret and accepted responsibility for their employees’ misdeeds, although the documents said high-level bank executives were unaware of the money laundering.
The banks also promised to cooperate with prosecutors in pending cases. The first of four trials is scheduled to start Thursday against six remaining defendants. Eleven people have already pleaded guilty and 20 are fugitives.
Bancomer and Banca Serfin agreed as well to implement stringent anti-money laundering procedures that meet international banking standards.
Because of their money laundering convictions, the two banks face mandatory hearings before the Federal Reserve Board to decide whether they should be barred from operating in the United States. The issue was a sticking point in the plea negotiations because loss of a presence in this country would deprive the banks of access to international capital.
To allay their concerns, the U.S. attorney’s office in Los Angeles agreed to write letters to the Fed lauding the banks’ cooperation.
U.S. Atty. Alejandro N. Mayorkas, who supervised the negotiations, described the banks’ guilty pleas as “a significant milestone in our efforts to combat the laundering of narcotics proceeds through financial institutions.”
Bancomer is Mexico’s second-largest bank, with close to $30 billion in assets. In addition to the $500,000 fine, the bank agreed to forfeit $9.4 million in its U.S. holdings. Banca Serfin, Mexico’s third-largest bank, with nearly $17 billion in assets, will forfeit $4.2 million.
Confia, once the 10th-largest bank in Mexico, sold off most of its assets to Citibank after it was indicted. U.S. authorities seized the $12.2 million before the sale occurred.
In their deals with all three banks, prosecutors agreed not to pursue any lawsuits seeking civil penalties for money laundering.
Operation Casablanca, described as the biggest drug money laundering investigation ever mounted, triggered strong protests from Mexican government officials after it became public. The Mexicans complained about being kept in the dark about the probe. Customs investigators said the secrecy was necessary because they feared a leak by corrupt Mexican law officers.