Citi says fraud at Mexico unit cost $165m in Q1

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Citigroup said fraud at its Mexico unit cost the company about $165m during the first quarter.

Bloomberg News reports that the vast majority of the costs were associated with Citigroup’s $33m in direct exposure to oil-services firm Oceanografia SA and 'uncertainty' about Petroleos Mexicanos’s obligation to pay a portion of accounts receivable involved in the case that total about $113m, Citigroup said in its quarterly filing with the U.S. Securities and Exchange Commission.

'The remaining incremental credit costs were associated with an additional supplier to Pemex within the Pemex supplier program that was found to have similar issues', Citigroup said. Chief Financial Officer John Gerspachdisclosed the $165m expense during the company’s first-quarter earnings call last month.

Citigroup, which has called the Oceanografia fraud an isolated incident, said last month that it found a second case at its Mexico unit. The amount involved was less than $30m, Gerspach said April 14.

To access the complete Bloomberg article hit the link below:

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