Latest news with #Intercam
Mint
6 days ago
- Business
- Mint
Mexico Steps In to Run Banks Tarred by US Drug Accusations
Mexico's bank regulator stepped in to temporarily run CIBanco SA and Intercam Banco SA, an extraordinary measure aimed at protecting customers following money-laundering accusations by US authorities. The claims that the lenders were potentially facilitating drug cartels' money laundering sent shock waves through a country scarred by banking scandals and raised questions about whether more institutions could become targets of Washington. Mexico's banking lobby rushed to say the interventions wouldn't impact the country's financial system. The National Banking and Securities Commission, or CNBV, said in a statement Thursday that it was replacing management at the CIBanco and Intercam 'in order to safeguard the rights of these institutions' savers and clients, given the potential implications for these banks of the measures announced by the United States Department of the Treasury.' CIBanco said in a statement that it would cooperate with the intervention and assured clients that their funds were safe under Mexican law. 'We will collaborate at all times with regulatory authorities in both Mexico and the United States, within the legal framework governing financial institutions, to address any potential concerns identified by the CNBV and FinCEN,' CIBanco said. Intercam didn't immediately respond to a request for comment, but had denied the accusations on Wednesday. The US Treasury's Financial Crimes Enforcement Network, or FinCEN, slapped CIBanco, Intercam and brokerage Vector Casa de Bolsa SA with orders that will prohibit certain fund transmissions with US entities. Vector, which is not a bank, is not subject to such intervention since it does not hold deposits. The orders take effect 21 days following publication in the US Federal Register. The register's website does not yet include publication of the orders. The regulator's move comes amid risks that clients could be spooked by the allegations even as President Claudia Sheinbaum responded defiantly to the US measures, arguing she's seen no evidence to support the designations. Mexicans have seen their fair share of banking scandals, from failures tied to related-party loans in the 1990s to HSBC Holdings Plc's admission to anti-money laundering and sanctions violations that facilitated the laundering of at least $881 million in drug proceeds. The Asociacion de Bancos de Mexico, or ABM, said the bank interventions wouldn't impact the stability of the country's banking system. 'The announced intervention seeks to create an environment of certainty that will allow institutions to operate normally for the time required to ensure that they meet regulatory standards,' ABM said in a statement. Investors also seemed little concerned the US measures poised a major risk to Mexico, with the peso currency posting its fourth day of gains. With Mexico's economic fundamentals still intact, long-term investors are not worried by the news, Karobaar Capital's Chief Investment Officer Haris Khurshid said, even if bank stocks could see some pressure. 'This is a serious reputational hit for Mexico's banking system, even if the fundamentals remain stable,' he said. 'The real risk is contagion, not just client outflows, but broader pressure on cross-border capital flows and compliance costs.' While the three firms tagged by the US are small, they are all well known for foreign exchange operations and overseas branches that invest the wealth of Mexicans. Vector was founded by a key ally of former President Andres Manuel Lopez Obrador. Intercam is known for its FX exchange traded funds. CIBanco has a nightly segment on Milenio TV explaining market moves. Manuel Somoza, a CIBanco executive, had to abandon his routine TV slot to defend his bank. He said CIBanco had not been contacted by US authorities prior to the announcement and was open to clearing up any concerns immediately. He said he had been on the phone with clients throughout the afternoon, assuring them their investments were safe. 'Rumors hurt you more than formal accusations,' he said. 'That's why we want them to conduct the investigation as quickly as possible.' This article was generated from an automated news agency feed without modifications to text.
The Guardian
6 days ago
- Business
- The Guardian
Mexican president demands proof after US accuses banks of laundering drug money
Mexican president Claudia Sheinbaum expressed frustration at US sanctions against three Mexican financial institutions accused of laundering drug money, and said the US has not yet provided any evidence of criminal activity. 'Until now, the treasury department has not sent any proof that indicates there is money laundering,' Sheinbaum said. 'We will act if there is proof.' She then publicly requested the treasury department 'send proof, if they have it, so we can accompany them in the process'. The US treasury department announced on Wednesday it was placing sanctions on three separate Mexican financial institutions, accusing them of being used to launder money for organized crime. The three institutions identified by the treasury's financial crimes unit (FinCen) are the large commercial banks CiBanco and Intercam, and the brokerage firm Vector Casa de Bolsa. FinCen is accusing them of laundering money linked to fentanyl trafficking. 'Financial facilitators like CiBanco, Intercam, and Vector are enabling the poisoning of countless Americans by moving money on behalf of cartels, making them vital cogs in the fentanyl supply chain,' treasury secretary Scott Bessent said in a statement. 'Through the first use of this powerful authority, today's actions affirm [the] treasury's commitment to using all tools at our disposal to counter the threat posed by criminal and terrorist organizations trafficking fentanyl and other narcotics.' Wednesday's announcement represents a further escalation by the Trump administration towards organized crime in Latin America. After Trump's inauguration, the administration declared a number of Mexican criminal groups as terrorist organizations. Other actions by the US have led to friction between the Mexican government and the Trump administration. Earlier this year, the Trump administration imposed 25% punitive tariffs on many imports from Mexico, in an attempt to pressure the country to halt fentanyl trafficking and migration towards the US. Additionally, the administration began revoking visas for some Mexican political figures, preventing them from traveling to the US. According to reporting by ProPublica, the administration has a list of a number of politicians accused of having ties to the drug trade, including allies of Sheinbaum. The treasury department says its actions come after acts passed by Congress provided the department additional authority to target money laundering networks linked to fentanyl trafficking. Fentanyl leads to tens of thousands of overdose deaths in the US every year. The drug is primarily manufactured in Mexico by criminal groups using precursor chemicals from China. It is typically pressed into pills, trafficked into the US and distributed nationwide. According to Sheinbaum, Mexican financial investigation agencies received information from the treasury department regarding the three financial institutions and transactions with Chinese businesses. Mexican officials, who viewed the evidence as insufficient, launched their own investigation and also requested further information from the US regarding the transactions. Sheinbaum says the US did not follow up in response to Mexico's request. 'We are not going to cover for anyone. There is no impunity,' Sheinbaum said. 'But it has to be demonstrated that, effectively, there was money laundering. Not with statements, but with hard evidence.' The treasury department, in its release, included different allegations against the institutions. In one instance, the department said, a CiBanco employee created an account in 2023 to launder $10m for a Gulf cartel leader. In another case, Intercam executives in 2022 allegedly met with suspected members of the New Generation Jalisco cartel 'to discuss money-laundering schemes, including transferring funds from China'. And in a third example, the department claimed that from 2013 through 2021, a Sinaloa cartel money mule laundered $2m from the US to Mexico through the Vector firm. 'CiBanco clarifies that it does not hold commercial relations outside of legality, and reiterates the compliance of all guidelines established by the relevant authorities,' CiBanco said in a statement on its website. 'CiBanco maintains constant communication with corresponding Mexican and United States authorities and underscores its willingness to collaborate.' Mexican banks are not the only financial institutions accused by the US of laundering dirty money for organized crime. Last fall, a US bank admitted to helping Colombian criminals launder money. The FinCen investigation led to a $1.3bn penalty, the largest penalty against a financial institution in history. Last year, the justice department unsealed an indictment, accusing a number of people of laundering money for the Sinaloa cartel and for 'groups linked to Chinese underground banking'. The multi-year DEA investigation, called Operation Fortune Runner, found that the alleged criminals used Citibank ATMs in California to launder drug money.
Yahoo
7 days ago
- Business
- Yahoo
US Accuses Three Mexican Financial Firms of Aiding Fentanyl Trafficking
(Bloomberg) -- The US government identified three Mexican financial firms for potentially laundering proceeds from illicit drug trafficking, effectively choking them off from the US financial system as it seeks to clamp down on cartels. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice US Renters Face Storm of Rising Costs US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Commuters Are Caught in Johannesburg's Taxi Feuds as Transit Lags Mapping the Architectural History of New York's Chinatown The US Treasury's Financial Crimes Enforcement Network, or FinCEN, said CIBanco SA, Intercam Banco SA and brokerage Vector Casa de Bolsa SA are all 'of primary money laundering concern,' according to a statement Wednesday. The orders prohibit certain transmissions of funds involving those firms. 'Financial facilitators like CIBanco, Intercam, and Vector are enabling the poisoning of countless Americans by moving money on behalf of cartels, making them vital cogs in the fentanyl supply chain,' Treasury Secretary Scott Bessent said in the statement. He vowed to use 'all tools at our disposal to counter the threat posed by criminal and terrorist organizations trafficking fentanyl and other narcotics.' Vector 'categorically' rejected US authorities' claims in a statement, saying it has been operating in line with the highest regulatory standards. 'The transactions reported correspond to ordinary transactions with legally established companies,' Vector said. Local media reports indicate that Vector is owned by Alfonso Romo, a multimillionaire businessman who served as chief staff to former President Andres Manuel Lopez Obrador early in his term and was the leftist populist's main link with the Mexican business community. Mexico's Finance Minister Édgar Amador Zamora also worked at Vector, according to his profile on the government's website. Intercam also issued a statement saying it 'categorically denies any involvement of this institution in any illicit practices, particularly money laundering, and we reiterate our commitment to transparency and legality.' CIBanco said it 'does not maintain links with activities outside the law' and complies with all regulations. After review by Mexican authorities, 'no elements can be identified that compromise CIBanco's operation or actions,' it said in a statement. FinCEN said the designations are its first under the Fentanyl Sanctions Act and the Fend Off Fentanyl Act, which give Treasury extra power to target money laundering tied to the trafficking of fentanyl and other synthetic opioids, including by cartels. Still, the moves fall short of stronger sanctions that the Office of Foreign Assets Control can impose which bar any business dealings with designated firms and individuals. US officials are ramping up efforts to tackle cartel finances following their designation by President Donald Trump as terrorist groups, giving his officials an array of charges and sanctions to crack down on the groups. The terrorist label, along with a more aggressive stance by the US Department of Justice toward cartels, has put bankers on edge and escalated regulatory risks for financial institutions with duties to spot illicit money flows. The three Mexican institutions 'have collectively played a longstanding and vital role in laundering millions of dollars on behalf of Mexico based cartels and facilitating payments for the procurement of precursor chemicals needed to produce fentanyl,' Deputy Treasury Secretary Michael Faulkender said during a call with media. Mexico's Finance Ministry said in a statement it had asked US authorities for evidence against the firms, but that it didn't provide any proof. Mexico's regulator is conducting a review of the three firms in question, it said. 'We want to be clear: If we have conclusive information proving illicit activities by these three financial institutions, we will act to the full extent of the law,' the Finance Ministry said. 'However, to date, we have no information in this regard.' Cartel Finance CIBanco, a commercial bank with about $7 billion in assets at the end of last year, provided financial services that helped cartels including the Beltran-Leyva cartel, the Jalisco New Generation cartel and the Gulf Cartel traffic opioids, according to FinCEN. In one example, an employee for the bank knowingly helped create an account to launder $10 million for a Gulf cartel member, FinCEN said. CIBanco was also instrumental in facilitating payments for Mexico-based companies to procure precursor chemicals, FinCEN said in its separate order against the lender. It listed hundreds of wire transfers totaling millions of dollars that were sent through CIBanco to companies in countries including Japan, South Korea, Taiwan, Switzerland and China to pay for those chemicals. Intercam, with about $4 billion of assets, also provided financial services that helped Mexican cartels traffic opioids, FinCEN said. It detailed more than 1,000 fund transfers made through the firm to shipping companies in countries including Singapore and Hong Kong that were known to have shipped precursor chemicals to Mexico, it said. Intercam has a fraud policy on its website where it states it recognizes the 'significant threat' of corruption and internal fraud. It's committed 'to taking proactive measures to avoid, detect and adequately respond to any internal fraudulent activity,' according to its website. Both banks are relatively small within Mexico. CIBanco is the country's 20th largest financial institution, meaning the impact of prohibiting certain fund transmissions will be negligible, according to FinCEN. All three financial institutions are closely held. Shares of publicly traded Mexican banks were little changed on the news, and the peso held its gains against the dollar, suggesting that the moves weren't seen by investors as a serious threat to Mexican financial markets. Precursor Chemicals For its part, Vector helped facilitate money laundering by cartels including the Sinaloa Cartel and Gulf Cartel, according to FinCEN. The firm with about $11 billion of assets also helped procure precursor chemicals from China for illicit purposes, it said. FinCEN highlighted an example where a Sinaloa Cartel money mule 'employed various methods to launder $2 million from the United States to Mexico through Vector.' Vector also allegedly handled some $40 million in transactions tied to Genaro Garcia Luna, a former top Mexican security official convicted in the US for taking bribes from the Sinaloa Cartel. 'Under President Trump, the Treasury Department has taken and will continue to take historic action to ensure that cartels and drug traffickers cannot abuse the US dollar to launder drug money and profit off the poisoning of Americans,' Faulkender said on the call with media. --With assistance from Carolina Millan and Andrea Navarro. (Updates with CIBanco comment in seventh paragraph.) Inside Gap's Last-Ditch, Tariff-Addled Turnaround Push How to Steal a House Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Apple Test-Drives Big-Screen Movie Strategy With F1 Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Post
7 days ago
- Business
- New York Post
Trump admin sanctions three Mexican financial firms over suspected links to drug cartels
The Trump administration on Wednesday restricted US banks from making transactions with three Mexican financial firms over concerns that they are laundering money for drug cartels. The sanctions – the first implemented under the Fentanyl Sanctions Act and the FEND Off Fentanyl Act – targeted Mexican banks CIBanco and Intercam Banco and the brokerage firm Vector Casa de Bolsa, which have a combined $22 billion in assets, according to the Treasury Department. 'Cartels have exploited Mexico-based financial institutions to move money, enabling the vicious fentanyl supply chain that has poisoned countless Americans,' Treasury Secretary Scott Bessent wrote on X. 'Through the first use of a new powerful authority granted by Congress, Treasury will effectively require US financial institutions to sever ties with 3 Mexico-based financial institutions for laundering money on behalf of cartels,' Bessent added. 'Both the United States and Mexico are committed to financial systems with strong anti-money laundering/countering the financing of terrorism controls and these actions affirm Treasury's commitment to using all tools at our disposal to counter the threat posed by terrorist organizations.' 4 Trump designated several Mexican drug cartels as terrorist groups earlier this year. REUTERS The sanctions were implemented after the Treasury Department's Financial Crimes Enforcement Network (FinCEN) determined that CIBanco, Intercam and Vector were 'moving money on behalf of cartels' and had become 'vital cogs in the fentanyl supply chain,' according to Bessent. FinCen's investigation found a 'long-standing pattern of associations, transactions, and provision of financial services' between CIBanco and Intercam and several Mexican drug trafficking groups, including Jalisco New Generation Cartel (CJNG) and Gulf Cartel. Between 2021 and 2024, CIBanco and Intercam processed over $3.6 million in purchases of fentanyl precursor chemicals from China, shipped to Mexico, for 'illicit purposes,' according to FinCen. The financial crimes watchdog further alleged that Intercam executives 'met directly with suspected CJNG members' in 2022 'to discuss money laundering schemes, including transferring funds from China,' and that a CIBanco employee 'knowingly facilitated the creation of an account to purportedly launder $10 million on behalf of a Gulf Cartel member' in 2023. 4 The sanctions were imposed under new authorities granted to Trump administration to combat illegal fentanyl. Jeffrey Greenberg/Universal Images Group via Getty Images 4 Treasury's financial crimes watchdog, FinCen, conducted the investigation against the Mexican banks. Vector's alleged dealings with drug cartels date back to 2013, according to FinCen, which found a Sinaola Cartel 'money mule' laundered at least $2 million from the US to Mexico through the brokerage firm. In 2021 alone, Vector 'remitted over USD 17 million in suspicious wire transfers to multiple China-based companies … on behalf of a company that was reportedly tied to an international drug trafficking organization,' according to FinCen. Since at least 2019, Vector processed fund transfers to 'over 20 China-based companies' that shipped fentanyl precursor chemicals to Mexico. 'Based on non-public information, as well as the volume and dollar amount of funds transfers that Vector processed over several years with these companies, FinCEN assesses that such transactions likely facilitated illicit opioid trafficking by Mexico-based [drug trafficking organizations],' the Treasury Department bureau noted. 4 The sanctions will prohibit US banks from making certain transactions with the three Mexican firms. FinCen also discovered that Vector processed 'bribes' paid by the Sinaloa Cartel to a former top Mexican law enforcement official who was convicted of corruption charges in 2023. The Treasury Department said it aims to deny anyone associated with Mexican drug cartels deemed Foreign Terrorist Organizations (FTOs) and/or Specially Designated Global Terrorists by the Trump administration 'access to the US financial system.'
