Citigroup must face another demand in which he is accused of having caused losses for more than one billion dollars allegedly to orchestrate and hide a fraud in the Mexican company of oil and gas services Oceanography, currently bankrupt, he ruled a court on Thursday.
A panel of three judges of the Court of Appeals of the 11th United States circuit in Miami said that 30 vendors, creditors and holders of oceanography bonds properly claimed that Citigroup CN substantially helped fraud, and that a first instance judge was wrong to dismiss the case of nine years old.
Danielle Romero-Apsilos, spokesman for Citigroup, declined to comment. Juan Morillo, one of the lawyers of the plaintiffs, said his clients were satisfied with the decision.
Banamex, Citigroup Unit, had provided cash advances to Oceanography, which provided drilling services to the state Petróleos Mexicanos (Pemex), and had gained the interests of advances.
The plaintiffs, including shipping companies and financial lease, investment funds and rabobank, based in the Netherlands, said that Citigroup advanced 3,300 million dollars to Oceanography between 2008 and 2014 despite knowing that the company had too much debt and had been falsifying Pemex firms in authorization forms.
-Later, Citigroup found almost 430 million dollars in fraudulent cash advances, and was fined with 4.75 million dollars for the United States Stock Exchange and Securities Commission in 2018 compared to Banamex’s internal controls.
The former Citigroup Executive President Michael Corbat said the bank fired 12 employees, and Mexican regulators said 10 bank workers were criminally responsible under Mexican law.
In a decision of 82 pages, the circuit judge Britt Grant considered sufficient allegations that Citigroup hid the plaintiffs key information about oceanography, and that interest payments constituted a financial incentive.
“Citigroup is one of the most sophisticated financial institutions in the world, and it is difficult to believe that, assuming that the allegations of the plaintiffs are true, I had no knowledge of the oceanography activities,” he added.
The court returned the case to the Darrin Gayles district judge of Miami, who dismissed him in August 2023.
