Citigroup Inc (C) Revises 2013 Results Downward Due To Fraud In Mexico

Citigroup Inc (NYSE:C) is revising its full pre-tax 2013 results lower by $360 million due to fraud in its Mexican subsidiary.  The charge to earnings revises 2013 net income to $13.7 billion.

Fraudulent customer accounts receivable at issue

The issue stems from $585 million in short-term loans Citigroup Inc (NYSE:C) provided to Oceanografia S.A. de C.V. (OSA), a Mexican oil services company, through an accounts receivable financing program. OSA has been a key supplier to Petróleos Mexicanos (Pemex), the Mexican state-owned oil company.

When it was discovered that OSA was suspended from being awarded Mexican government contracts, both Cit and Pemex reviewed their credit exposure.  The review found that fraudulent receivables were...