Citigroup Accused of Facilitating Drug Money Laundering

Drug traffickers have found an unexpected ally in their money laundering endeavors: Citigroup. Beyond the realm of cryptocurrencies, these illicit actors have turned to traditional banking, viewing Citigroup as accommodating due to perceived weaknesses in its fraud prevention measures. Recent allegations have raised concerns about the bank’s role in facilitating money laundering activities.

The Cash Deposits and Suspicions

Two Californians, Guillermo Zambrano and Luis Belandria-Contreras, deposited nearly $36,000 in suspicious cash installments at Citibank ATMs in January 2021. These deposits were made in small increments, with short intervals between transactions, potentially to avoid triggering anti-money laundering measures. The men are reportedly linked to the Sinaloa drug cartel, one of the world’s most dominant drug trafficking organizations.

Weaknesses in Oversight

Prosecutors allege that Zambrano and Belandria-Contreras split the larger sum into numerous smaller deposits, each under $10,000. This strategy aimed to evade mandatory cash transaction reports that banks must file with the US Treasury. Officials from the Drug Enforcement Administration (DEA) suspect that the two individuals are part of a large criminal organization responsible for laundering at least $50 million from fentanyl and methamphetamine sales in the US. The DEA highlights Citigroup’s looser oversight compared to other banks, suggesting that it may have offered an easier path for money laundering.

Traditional Banking and Criminal Activity

While cryptocurrencies often face scrutiny for illicit fund transfers, the Financial Times report underscores that criminals also exploit traditional banking channels for money laundering and drug trafficking. Mexican drug cartels, in collaboration with Chinese counterparts, have become increasingly adept at using regular banks to clean their ill-gotten gains. Notably, even as cryptocurrencies gain attention, the allure of traditional banking remains strong for criminal enterprises.

Citigroup’s alleged role in facilitating drug money laundering raises questions about the effectiveness of existing oversight mechanisms. As law enforcement agencies continue their efforts to combat illicit financial activities, the spotlight remains on both traditional banks and emerging digital currencies. The battle against money laundering requires vigilance across all financial sectors, regardless of the medium used.