Report: US Government Investigating Citigroup’s Anti-Money Laundering Policies

U.S. government agencies are reportedly investigating Citigroup’s anti-money laundering (AML) policies and its ties to a sanctioned Russian official.

The Department of Justice (DOJ), the FBI and the IRS are looking at the bank’s work for a trust that holds assets owned by Russian billionaire Suleiman Abusaidovich Kerimov, Bloomberg reported Thursday (Nov. 14), citing unnamed sources.

A Citigroup spokesperson told Bloomberg: “Citi is committed to conducting all business with the highest consideration for compliance with all applicable laws and regulations. At the same time, we are actively ending nearly all of our institutional banking business in Russian, except for those operations necessary to fulfill remaining legal and regulatory obligations, while we proceed with the closing of our Russian consumer banking business.”

During an Oct. 15 earnings call, Citigroup CEO Jane Fraser spotlighted the company’s continuing transformation process by noting that the company recently closed a longstanding consent order tied to its anti-money laundering systems.

“We have increased our investments in areas where we have not made sufficient progress, such as data quality management,” Fraser said. “I and the management team remain steadfast and determined to get this transformation right and to get this done.”

The Federal Reserve announced Oct. 1 that it terminated its decade-old enforcement action against Citigroup that was focused on deficiencies tied to the banking giant’s anti-money laundering practices.

In the 2013 documentation of the consent order, the Fed said that Citigroup had “adopted a firmwide compliance risk management program designed to identify and manage compliance risks across the consolidated organization related to compliance with all applicable laws, rules and regulations,” and that the consent order did not constitute an admission or denial of the allegations made as part of the enforcement action.

There is growing scrutiny on anti-money laundering efforts, highlighted by enforcement actions and fines from regulators when banks, FinTechs and other firms are deemed to come up short, PYMNTS reported in July.

At the same time, the rules governing anti-money laundering and fraud-fighting efforts may change, as regulators seek input on the use of advanced technologies to sharpen fraud defenses at financial institutions.