Update: Citibank shut down in Japan for aiding money laundering. Reuters news agency reported that regulators charged the bank with "failing to prevent suspected money laundering." Citibank has been caught before courting big depositors, no matter how nefarious their operations may be. On Oct. 30, 1998, the General Accounting Office issued a report giving detailed information showing that the bank ignored the law and its own internal procedures in assisting Raul Salinas, brother of the former president of Mexico, to move between $90 million and $100 million of suspected drug money out of Mexico.
For more information read Citibankisracist blog.Remember those black employees who sued over those racist emails circulated by management? I do.
White vice presidents and lower-level employes of Citibank sent racist jokes throughout the megabank's interoffice E-mail, according to a lawsuit filed by enraged black workers.
The E-mail [contained] a series of spoofs on the black speech patterns known as Ebonics started at the bank's Wall Street offices and wound up at offices around New York and as far south as Florida.
Citibank forced to pay back $14M in sweeps money scammed from their customers.
Between 1992 and 2003, Citibank operated an "automatic sweeping" program that would without notice remove positive balances from customers' credit card accounts—mainly those of the poor and the recently deceased—and pocket the money. Now it's paying back $14 million dollars to the affected customers, plus another $3.5 million in penalties to California, thanks to that state's Attorney General.
Nice. Here is a pending MCAD filing.
Marc Dann v. Citibank, CASE NO. 2:07 CV 1149, 2008 U.S. Dist. LEXIS 52172
In the Complaint, Plaintiff alleges violations of the Ohio Consumer Sales Practices Act ("OCSPA"), Ohio Rev. Code § 1345.01 et seq. Specifically, Plaintiff alleges that CitiBank through its agent or employee, produced and distributed fliers on or around the Ohio State University main campus offering students a free sandwich and drink at Potbelly Sandwich Work's off-campus location, without disclosing that to obtain the free items, a student was required to complete an application [*3] for a CitiBank credit card.
Then they were at it again in Russia.
ReplyDeleteGAO report.
We previously reported similar violations by one of these banks.20
20 Private Banking: Raul Salinas, Citibank, and Alleged Money Laundering (GAO/OSI-99-1, Oct. 30, 1998).
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The relationship between Citibank and IBC expanded in 1996 when Euro-American was formed and IBC/Euro-American began referring Russian companies to Citibank for the purpose of opening accounts. According to the Citibank account officer, the president of IBC vouched for the newly formed companies and said that he knew the officers of the companies personally, by reputation, or as a result of conducting his own investigation. Citibank opened the accounts based upon the IBC president's representations, with the stipulation that the customers would personally appear at Citibank with appropriate identification within 30 days of opening the account. A Euro-American employee served as a Russian interpreter for those customers who personally appeared at Citibank to open accounts. Citibank did not conduct due diligence regarding IBC/Euro- American-referred customers.16
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16 We previously reported that Citibank's failure to enforce its know your customer policy facilitated a money-laundering scheme that disguised the origin, destination, and beneficial owner of the funds involved. See Private Banking: Raul Salinas, Citibank, and Alleged Money Laundering (GAO/OSI-99-1, Oct. 30, 1998).
A Citibank official advised us that the bank closed some of the accounts opened for IBC clients because the clients had failed to appear personally at Citibank offices within 30 days after the accounts were opened. He added that the accounts were fully functional for the initial 30-day period, allowing wire transfer capabilities, and that all transactions in and out of these accounts were by wire transfers. Although we do not know the number of IBC/Euro-American referred Citibank customers who appeared personally at the bank, our review of records obtained from Citibank indicates that no accounts of IBC/Euro-American referred customers were closed within 4 months of being opened. Further, more than $800 million was deposited through wire transfer transactions from foreign countries into IBC/Euro-American client accounts at Citibank. Over 70 percent of these deposits was subsequently moved out of the U.S. banking system through wire transfer transactions to accounts in foreign countries. According to a Citibank official, these deposits included funds from Russia; and Citibank no longer opens accounts for clients of IBC/Euro-American because of concerns over suspicious account activity.