09/28/14 (written by cmolzahn; update provided below original article) — Mexico’s Attorney General’s Office (Procuraduría General de la República, PGR) moved forward in its investigation into fraud in Citibank’s Mexican subsidiary Banamex, involving Mexican oil services firm Oceanografía, pursuing formal charges against Oceanografía CEO Amado Yáñez and seeking the extradition from the United States of a prominent Oceanografía shareholder. Earlier this year, Citibank accused Mexican oil services firm Oceanografía of defrauding its Mexican subsidiary Banamex out of more than $400 million (USD), forcing the bank to revise their 2013 earnings report downwards. 12 Banamex employees were fired as a result of the fraud, which Citibank said resulted from weak internal controls in the bank.
Early this month, the Mexican government requested that the U.S. government detain and extradite Martín Díaz Álvarez, the cousin of former-finance minister Francisco Gil Díaz, Oceanografía’s second largest stockholder, and a former Banamex manager. Speaking at a regional justice convention, Mexico’s Attorney General Jesús Murillo Karam indicated that Díaz Álvarez is just one of a number of individuals under investigation by the PGR. The PGR has indicated that Díaz, who is said to be living in a luxury condominium in Miami, is one of the Oceanografía managers responsible for falsifying documents to obtain fraudulent loans from Banamex. His former associate Amado Yáñez, Oceanografía’s principle shareholder, has accused Díaz of being the one responsible for the fraud. Yáñez told the PGR’s organized crime division (Subprocuraduría Especial en Investigaciones de Delincuencia Organizada, SEIDO) that he had hired Díaz in 2009 to restructure the company’s finances, and that he had since “directly, jealously and possessively” controlled the company’s dealings with Banamex. Díaz was given 15% of the company’s shares as a hiring bonus, thus making him the #2 shareholder. Yañez also emphasized Díaz’s ties to Banamex, particularly with Francisco Gil Díaz, his uncle, former treasury minister during the Vicente Fox administration, and adviser to Banamex. According to the PGR, Díaz funneled the illegal funds from Oceanografía into a variety of businesses, including a tequila distillery boasting the most expensive bottle of tequila in the world. While the PGR has frozen Díaz’s bank accounts, it has thus far left his material assets untouched, including his expansive home in the upscale Lomas de Chapultepec neighborhood in Mexico City and a 300-hectare ranch on the México-Querétaro highway.
Meanwhile, Treasury Minister Luis Videgaray answered concerns from the Mexican Congress that authorities had under-prioritized Yáñez as a focus of investigations into the Banamex fraud case. Videgaray insists that the PGR continues to investigate Yáñez, and he also rejected claims from some members of congress that Yáñez is working as an assessor or employee of the Administration and Alienation of Assets Service (Servicio de Administración y Enajenación de Bienes, SAE), an agency within the Treasury Ministry. Following the revelation of the scandal, Oceanografía was taken over by the SAE, and is still being administered by that agency. Yáñez was held under house arrest for nearly two months before being released in early June on $6.2 million (USD) bail. This followed his indictment on fraud charges for his alleged role in the Oceanografía-Banamex scandal, which he continues to deny.
Update 04/22/21:
Since the publication of this article, Mexican courts provisionally suspended the case against Amado Yáñez Osuna by a federal order on the grounds of an amparo, or court-ordered injunction.
Update 06/08/21:
Since the publication of this article, the First Circuit’s Seventh Associate Court in Criminal Matters reportedly granted Martin Díaz Álvarez an injunction (amparo) cancelling the arrest warrant in the federal attorney general’s embezzlement case against him, owing to a lack of evidence that he had any formal appointment with Oceanografía.
Sources:
Barajas, Abel. “Implica a socio Amado Yáñez.” Reforma. June 11, 2014.
Guthrie, Amy. “Citigroup to Bolster Mexican Unit.” Wall Street Journal. September 9, 2014.
