Citigroup’s Banamex Says Alleged Bad Loans Will Hurt Profit

April 16, 2014

finance-market_dataThe Wall Street Journal, 4/14/14

Citigroup Inc.  ‘s Mexican unit, Grupo Financiero Banamex, said Monday that its first-quarter net profit will be reduced by $112 million due to reserves it has set aside to cover seemingly bad loans to Mexican oil services firms.

The cut comes on top of Citigroup’s move to reduce its fourth-quarter and full-year results by about $235 million after finding allegedly fraudulent billings at its Mexico unit.

Banamex said that the new charge is related to loans it extended to Oceanografía SA de CV, the company that Citigroup accused of fraud in February, as well as from loans to a second oil services firm that appears to have also engaged in fraud.

Citigroup disclosed earlier Monday that the second potential fraud it has uncovered involved less than $30 million in credit. The New York bank declined to reveal the name of the second company. Mexican authorities said Citigroup hasn’t yet filed charges against another oil services firm.

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Autoridades trasladan a Apatzingán a integrantes de autodefensas detenidos

April 16, 2014

prisonCNN Mexico, 4/15/14

La Secretaría de Seguridad Pública (SSP) de Michoacán trasladó este martes a 20 personas relacionadas con grupos de autodefensas al Centro de Readaptación Social (CERESO) de Apatzingán, procedentes de diferentes reclusorios del país.

En un comunicado, la dependencia estatal refirió que esta acción forma parte de los 11 puntos acordados el lunes entre autoridades y líderes de autodefensas de la región de Tierra Caliente, en la entidad michoacana.

Entre los acuerdos para darle una solución legal a la operación de los grupos de civiles armados en Michoacán, se estableció que a partir del 11 de mayo los integrantes de autodefensas que no se sujeten a los puntos pactados, podrán ser detenidos y consignados ante los tribunales.

Este martes, la SSP Michoacán detalló que las personas trasladadas desde diferentes centros federales de detención (en Veracruz, Estado de México y Tamaulipas) a Apatzingán, están recluidas junto con otras 35 personas relacionadas con grupos de autodefensa michoacanos.

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Are U.S. Companies More Willing To Play Along With Mexico’s Corruption Culture?

April 16, 2014

money laundering -- dollar billsReuters, 4/15/14

Citigroup (NYE:C) disclosed Monday that it had found another case of fraud in its accounts-receivable program at Banamex, its Mexican unit, involving a supplier to Mexico’s state oil monopoly Pemex. In a teleconference, the bank’s chief financial officer, John C. Gerspach, did not reveal the identity of the supplier, but citing Pemex sources, the Mexican press identified it as Evya, a Mexican oil service company.

Gerspach reported that the breach involved less than $30 million in costs to Citigroup. He added that the supplier was in the process of paying back Citigroup and the bank expected “full restitution.”

According to its website, Evya,  based in the southeastern state of Campeche, is a “100% Mexican company” that provides engineering and maintenance services. Between 2003 and 2014, Evya signed 84 contracts with Pemex. The Mexican press identified brothers Francisco Javier, Luis y Roberto Camargo Salinas as Evya’s owners.

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Vigilantes to disarm in Mexico’s Michoacan state

April 16, 2014

m16 gun closeupLA Times, 4/15/14

The Mexican government has set a date for the so-called self-defense militias in the troubled western state of Michoacan to dissolve and account for their weapons, a move that does not necessarily signal the end of the vigilante movement.

Alfredo Castillo, the administration’s point-man for Michoacan state, said in a series of interviews Tuesday that the militias had agreed to disband by May 10.

Those who want to continue patrolling the towns of Michoacan will have to become part of a new statewide rural police force, Castillo said. All current militia members, however, will be allowed to keep their weapons, regardless of whether they join the police force, as long as they register them with the army and keep them at home, he said.

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Cartel violence ramps up in Mexican border state of Tamaulipas

April 15, 2014

tamaulipasDallas News, 4/14/14

In the troubled state of Tamaulipas, authorities are bracing for widening conflict that in recent days has left more than 30 people dead and, in this city bordering Texas, led to a spate of kidnappings and extortion. The mayhem comes as residents were just beginning to talk of an unusual lull in violence.

But in recent weeks, four to five people a day have been kidnapped in Nuevo Laredo, and extortion is on the rise, U.S. law enforcement authorities said. They attributed the rising insecurity to the renewed power of the Zetas drug cartel, with ties in the Dallas area. At least eight of the kidnapped victims are Americans, some with links to organized crime, the authorities said.

On Friday, Mexico’s attorney general, Jesús Murillo Karam, said plans for a security operation were underway to restore calm in the state, which analysts and officials say is poised for future foreign investment as a result of a landmark energy reform announced in December.

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Sen. Klobuchar pressing Mexico on heroin cartels and sex rings

April 15, 2014

mexican drugsStar Tribune, 4/15/14

Democratic Sen. Amy Klobuchar is pressing Mexican law enforcement authorities to acknowledge responsibility for spiking numbers of heroin and sex-trafficking incidents that increasingly are ravaging neighborhoods and families across the United States — including Minnesota.

In a series of meetings in Mexico City, Klobuchar is joining North Dakota Sen. Heidi Heitkamp and Cindy McCain, wife of Arizona Sen. John McCain, in urging the Mexican government to intensify its work on both sex trafficking and the illegal movement of heroin into the United States.

“One of the things we can acknowledge when we’re meeting with them is that we have our own issues on this,” said Klobuchar in an interview from Mexico. “We’re not just telling them, ‘Do this or do that.’ We are saying we have our own issues.”

The domestic heroin crisis is escalating rapidly, particularly in the Midwest. Hospital emergency department visits for heroin in the Twin Cities nearly tripled from 2004 to 2011. The number of heroin deaths in the metro area has tripled since 2011, to 63 last year.

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Autodefensas registrarán sus armas y se desmovilizarán

April 15, 2014

Guns by Flickr user barjackMilenio, 4/14/14

Autoridades federales y locales, así como pobladores de la zona de Tierra Caliente, en Michoacán, incluyendo grupos de autodefensas, alcanzaron este lunes 11 acuerdos en materias de legalización, coordinación, desmovilización, diálogo, protección, compensación y soluciones legales, que deberán cumplirse al 10 de mayo próximo, informó la Secretaría de Gobernación (Segob).

En un encuentro coordinado por la Comisión para la Seguridad y el Desarrollo Integral de Michoacán, se lograron dichos acuerdos que pretenden dispensar la situación en los municipios más conflictivos de la región, detalló la dependencia en un comunicado.

De esta forma, se acordaron cuatro puntos en materia de legalización y coordinación: abrir la posibilidad de que aquellos pobladores que lo deseen, puedan incorporarse a la Policía Rural Estatal para que puedan brindar protección a sus comunidades de manera legal; ampliar el proceso de inscripción a los Cuerpos de Defensa Rurales de la Secretaría de la Defensa Nacional (Sedena).

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Democrat Says Immigration Reform Has Stalled Because Of GOP ‘Racism’

April 15, 2014

Obama-immigration-reformFox News Latino, 4/14/14

A lawmaker who heads a House committee to elect Democrats blamed the country’s failure to pass immigration reform on Republican “racism.” Rep. Steve Israel’s comments are in line with those from House Democratic Leader Nancy Pelosi earlier this week, in which she blamed racial issues for the GOP’s failure to act on comprehensive immigration legislation. Asked about Pelosi’s comments, New York’s Israel said he agreed with her assessment.

“To a significant extent, the Republican base does have elements that are animated by racism. And that’s unfortunate,” said Israel, who heads the Democratic Congressional Campaign Committee. Frustration is mounting among the House’s Democratic minority and immigration activists about Republicans’ refusal to act on a far-reaching immigration bill passed by the Senate last year. The Senate bill would provide a path to citizenship for the estimated 11 million immigrants living in the country illegally and tighten border security.

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Why Rand Paul didn’t really blast Jeb Bush on immigration

April 15, 2014

Photo by Flickr user jcolman

The Christian Science Monitor, 4/13/134

When potential presidential hopeful Jeb Bush said last weekend that illegal immigration was not a felony, but instead often an “act of love,” he was surely braced for the blowback from conservatives. And it has come. But on Sunday, the latest rebuke was among the gentlest, and that could suggest that the entire tone of the conversation will change next year.

Speaking to ABC News on Sunday, Sen. Rand Paul (R) of Kentucky said Mr. Bush “might have been more artful, maybe, in the way he presented this,” adding that the problem with Bush’s views are that “we can’t invite the whole world.”

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Mexico bank regulator, Citigroup report second fraud at Banamex

April 15, 2014

banamexReuters, 4/14/14

Citigroup and Mexico’s bank regulator on Monday said they uncovered a second fraud at Citi’s local unit Banamex, as part of a wider investigation following the discovery in February of fraudulent loans to oil services company Oceanografia.

Mexico’s National Bank and Securities Commission (CNBV) said the investigation found another company with under $30 million in fraudulent loans.  Citigroup (C.N) in February said it found $400 million in bad loans at Banamex, Mexico’s No.2 bank by assets, made to Oceanografia and backed by apparently fraudulent invoices to state-owned oil company Pemex.

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