Citigroup is once again in legal crosshairs, accused of enabling a billion-dollar financial ruse tied to a collapsed Mexican oil services company—and this time, a federal appeals court says the claims deserve their day in court.
A U.S. appeals panel in Miami has resurrected a long-dormant lawsuit against the banking giant, ruling that 30 former vendors, bondholders, and creditors of Oceanografía S.A. de C.V. made a compelling case that Citigroup didn’t just look the other way—but actively helped perpetuate one of Mexico’s more notorious corporate collapses.
At the core of the suit: allegations that Citigroup’s Mexican arm, Banamex, shoveled $3.3 billion in cash advances into Oceanografía between 2008 and 2014, even as red flags flared—ballooning debt, phony authorizations, and forged signatures tied to Pemex, Mexico’s state oil firm. According to plaintiffs, Citigroup not only knew the house was on fire but helped toss gasoline on it, motivated by juicy interest payments and secured by silence.
The lawsuit had been previously tossed out by a district court, but the 11th Circuit’s 82-page decision reversed that call. Judge Britt Grant noted the plaintiffs alleged enough to suggest Citigroup knowingly withheld critical information—despite its image as a highly sophisticated institution with ample means to detect fraud.
Citigroup has refused to comment. Plaintiffs’ representatives, however, welcomed the ruling, which sends the case back to District Judge Darrin Gayles in Miami.
This legal saga traces back to Oceanografía’s spectacular downfall in 2014, when a web of fake invoices and falsified documents unraveled. Citigroup later admitted to nearly $430 million in bogus loans and was fined $4.75 million by the SEC for internal control failures. A dozen Citigroup employees were fired, and Mexican authorities pointed to criminal liability for ten more.
Now, as the case of Otto Candies LLC et al. v. Citigroup Inc. roars back to life, the question remains: Did one of Wall Street’s most powerful banks knowingly bankroll a fraud—and profit from it?
