Mexican authorities want to put the chief executive of Oceanografía SA under house arrest in connection with the alleged multimillion-dollar fraud against Citibank’s Mexico unit.
According to a Wall Street Journal report Monday, the Attorney General’s Office said Amado Yáñez Osuna, the CEO and principal shareholder of Oceanografía, voluntarily appeared Saturday to give a statement in the investigation after he was summoned by authorities for questioning.
“Based on the information provided by the executive, prosecutors have sought a house-arrest order from a federal judge to collect additional evidence in the investigation, the Attorney General’s Office said in a statement,” the WSJ said.
Oceanografía operates a fleet of vessels to provide platform maintenance, transportation and other services.
It is a contractor for the state oil monopoly Petróleos Mexicanos, or Pemex.
In February, Pemex suspended Oceanografia from all existing and new contracts after finding inconsistencies in how Oceanografia billed.
The attorney general seized the company’s assets to preserve them during the fraud investigation.
New York-based Citigroup said a review of loans to Oceanofrafia showed that the company had actually posted only $185 million in collateral and not the $585 million the bank had relied on.
Citibank said Oceanografia had allegedly submitted nearly $400 million of fraudulent invoices for short-term credit which were processed by a bank employee.
Citigroup was forced to reduce 2013 profit by $235 million because of Oceanofrafia’s alleged fraud.
Mexico’s police are questioning an employee who worked for Citibank’s Mexico unit, Banco Nacional de Mexico, or Banamex.
It’s the second biggest bank in Mexico.
The U.S. Securities and Exchange Commission is also reported to be investigating accounting fraud at Citibank.
