A headache is growing for Citigroup as a banking affiliate involved in money transfers across the Mexican border has become ensnared in a criminal investigation, the New York Times DealBook blog reported today. The disclosure of the inquiry yesterday follows the bank’s admission on Friday that it had been defrauded of $400 million in a scheme involving a financially shaky oil services company in Mexico. A Citigroup affiliate based in Los Angeles received a grand jury subpoena from federal prosecutors in Massachusetts related to anti-money-laundering compliance, the bank said in a securities filing yesterday, though the focus of the subpoenas is unclear. The affiliate has also received a subpoena from the Federal Deposit Insurance Corp. related to its anti-money-laundering program and the Bank Secrecy Act.
