Pubdate: Wed, 31 Mar 1999 Source: San Jose Mercury News (CA) Copyright: 1999 Mercury Center Contact: http://www.sjmercury.com/ Author: Michael White MEXICAN BANKS GUILTY IN HIDING OF DRUG MONEY Two of Mexico's biggest banks agreed Tuesday to forfeit millions of dollars and pay hefty fines in a settlement over charges they laundered money supplied by U.S. informants posing as drug traffickers. Grupo Financiero Bancomer SA and Grupo Financiero Serfin SA will each pay $500,000 in criminal fines. Bancomer also will forfeit $9.4 million seized by authorities. Serfin will forfeit about $4.2 million. Attorneys for each bank entered guilty pleas to one count of money laundering during a hearing before U.S. District Judge Lourdes Baird in Los Angeles. The banks also were sentenced to three years of probation, conditioned upon paying the fines and keeping agreements to assist in the prosecution of individuals charged in the case and develop anti-laundering programs. [N510] Posted at 7:58 p.m. PST Tuesday, March 30, 1999 Mexican banks plead guilty in drug money case BY MICHAEL WHITE Associated Press LOS ANGELES -- Two of Mexico's biggest banks agreed Tuesday to forfeit millions of dollars and pay hefty fines in a settlement over charges they laundered money supplied by U.S. informants posing as drug traffickers. Grupo Financiero Bancomer S.A. and Grupo Financiero Serfin S.A. will each pay $500,000 in criminal fines. Bancomer also will forfeit $9.4 million seized by authorities. Serfin will forfeit about $4.2 million. Attorneys for each bank entered guilty pleas to one count of money laundering during a hearing before U.S. District Judge Lourdes Baird. The banks also were sentenced to three years probation, conditioned upon paying the fines and keeping agreements to assist in the prosecution of individuals charged in the case and develop anti-laundering programs. Prosecutors planned to drop charges against a third Mexican financial institution, Banca Confia. Confia, which sold most of its assets to Citibank after it was indicted, agreed to forfeit $12.1 million seized from its U.S. holdings. ``The guilty pleas represent not only the culmination of the government's efforts to hold the banks responsible for the past conduct of their employees, but also signify the government's success in ensuring the banks join us in our efforts to combat money laundering,'' said U.S. Attorney Alejandro N. Mayorkas. The money is part of $100 million seized from 14 banks and dozens of individuals in Operation Casablanca, a three-year investigation of money laundering activities of Colombia's Cali drug cartel and the Juarez cartel in Mexico. 46ederal prosecutors say tens of millions of dollars were laundered through phony transactions to Mexican-owned banks. The money was supplied to the banks through a government informant and undercover U.S. Customs Service agents operating out of a storefront in Santa Fe Springs, Calif. The bankers were told, usually as they visited Santa Fe Springs, that the money came from Colombia's Cali drug cartel. The sting operation also included a former member of Mexico's Juarez cartel who helped recruit the bankers, according to court documents. Assistant U.S. Attorney Julie Shemitz told Baird that the laundering activities were carried out by branch-level employees without the knowledge of upper management. A statement issued by Serfin described the plea as ``a proper business decision.'' ``Banca Serfin has acknowledged responsibility for the conduct of a former employee,'' the statement said. Bancomer officials and attorneys declined to comment. The pleas didn't end the government's case. Jury selection started Monday for six Mexican bankers and businessmen charged in the case. Prosecutors also are working out a civil settlement with Banco Industrial Venezuela, one of two Venezuelan banks implicated. Other civil actions may be filed. - --- MAP posted-by: Derek Rea