U.S. DEA says drug money launderers targeted Citi ATMs because 'they're more favorable to them,' report says

By STeve Gelsi

Officials tell the Financial Times alleged money launderers shopped for banks that pay less attention than others

U.S. federal law enforcement officials, in a case against two drug traffickers, said the suspects chose to use ATMs from Citigroup Inc. to try to launder money because they are more favorable for their operation, the Financial Times reported.

The comments from Drug Enforcement Administration officials in the report came as charges were filed against two California residents allegedly tied to the Sinaloa drug cartel who were accused of using Citigroup Inc. (C) ATMs to deposit at least $36,000 in dozens of mini transactions.

"I will name one [bank]," a DEA agent told the Financial Times. "There were two instances where in this investigation we had money couriers making 24 back-to-back deposits totaling $16,000 to a Citibank ATM?.?.?. There were 15 back-to-back deposits totaling $20,000 also to a Citibank ATM?.?.?. They figure out the places that are more favorable to them," the report said.

A spokesperson for Citigroup said in an email to MarketWatch that the bank's anti-money laundering programs remain "robust" and "designed to detect and report" suspected activity to the government.

The bank also told The Financial Times it's not allowed to comment on or confirm the existence of suspicious activity reports or to talk about its work with law enforcement on this specific case.

A DEA spokesperson did not immediately reply to an email from MarketWatch.

Citing an indictment unsealed last week, prosecutors said the two suspects made smaller deposits to remain below the $10,000 triggering point where banks report cash transactions to the U.S. Treasury.

A separate source told the Financial Times that the two suspects accused of taking part in $50 million in illegal fentanyl and methamphetamine sales decided to use Citi ATMs after checking out other options.

"There are banks that pay less attention than others," the official said.

The FT report did not provide the names of the agents citing the activity.

The DEA has been tracking a surge in cash being deposited in banks.

The London based international bank HSBC (UK:HSBA) (HSBC) in 2012 paid $1.9 billion in fines to the U.S. Department of Justice for allegedly failing to maintain an effective anti-money laundering program and to conduct appropriate due diligence on its foreign correspondent account holders.

-STeve Gelsi

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07-02-24 0950ET

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