United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office Office of Special Investigations author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1999-11-09 monographic deposited born digital 14 p. GA 1.13:T-OSI-00-3 https://www.govinfo.gov/app/details/GAOREPORTS-T-OSI-00-3 P0b002ee18038de82 f:os00003t DGPO 2010-08-12 2011-03-28 GAOREPORTS-T-OSI-00-3 machine generated eng fdlp REPORT GAOREPORTS-T-OSI-00-3 T-OSI-00-3 Fraud Lending institutions Bank deposits Electronic funds transfer Money laundering Organized crime Banking regulation Internal controls Law enforcement Bank examination New York Mexico Other Written Product OSI

Pursuant to a congressional request, GAO discussed its 1998 investigation of alleged illegalities involving Raul Salinas de Gotari, brother of the former President of Mexico, Carlos Salinas de Gotari, and a U.S. bank, Citibank.<p/>GAO noted that: (1) Mr. Salinas was able to transfer $90 million to $100 million between 1992 and 1994 by using a private banking relationship formed by Citibank New York in 1992; (2) the funds were transferred through Citibank Mexico and Citibank New York to private banking investment accounts in Citibank London and Citibank Switzerland; (3) beginning in mid-1992, Citibank actions assisted Mr. Salinas with these transfers and effectively disguised the funds' source and destination, thus breaking the funds' paper trail; (4) Citibank: (a) set up an offshore private investment company named Trocca, to hold Mr. Salinas' assets, through Cititrust (Cayman) and investment accounts in Citibank London and Citibank Switzerland; (b) waived bank references for Mr. Salinas and did not prepare a financial profile on him or request a waiver for the profile, as required by then Citibank know your customer policy; (c) facilitated Mrs. Patricia Paulina Salinas' use of another name to initiate fund transfers in Mexico; and (d) had funds wired from Citibank Mexico to a Citibank New York concentration account--a business account that commingles funds from various sources--before forwarding them to Trocca's offshore Citibank investment accounts; (5) no U.S. documentation identified Mr. Salinas as Trocca's beneficial owner or connected Mr. Salinas to the Trocca funds transferred through Citibank Mexico and Citibank New York; (6) according to Citibank New York's Vice President for Legal Affairs, Citibank's actions violated only one aspect of the then Citibank know your customer policy; (7) Citibank should have prepared a financial profile or waived the requirement before accepting Mr. Salinas as a customer; (8) by investigating his financial background, Citibank could have verified the source of Mr. Salinas' wealth and transferred funds; (9) limited by the ongoing Department of Justice investigation, GAO could not determine whether Citibank's actions violated law or regulation; (10) the Federal Reserve also did not comment on whether Citibank's actions were violations because information available to it at the time GAO inquired was insufficient for it to make a determination; (11) however, the Office of the Comptroller of Currency stated that the actions did not violate civil aspects of the Bank Secrecy Act; (12) private banking's know your customer policies were then voluntary and not governed by law or regulation; and (13) a comparison of Citibank actions and Citibank testimony in the 1994 money laundering trial shows that the two were inconsistent concerning due diligence and know your customer practices in private banking. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-OSI-00-3/html/GAOREPORTS-T-OSI-00-3.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-T-OSI-00-3/pdf/GAOREPORTS-T-OSI-00-3.pdf GAO/T-OSI-00-3 https://www.govinfo.gov/app/details/GAOREPORTS-T-OSI-00-3 Other Written Product GAO/T-OSI-00-3; Private Banking: Raul Salinas, Citibank, and Alleged Money; Fraud Lending institutions Bank deposits Electronic funds transfer Money laundering Organized crime Banking regulation Internal controls Law enforcement Bank examination New York Mexico Title 12 Section 1829b Title 12 Section 1951-59 12 U.S.C. 1829b 12 U.S.C. 1951-59 Title 18 Section 1956 18 U.S.C. 1956 Title 31 Section 5311-30 31 U.S.C. 5311-30