REFILE-Former employee of Citigroup's Banamex denies he took part in loan fraud

Fri Jul 25, 2014 8:03pm EDT

(Refiles without changes to text, fixes dateline to Mexico City)

By Elinor Comlay

MEXICO CITY, July 25 (Reuters) - A former middle manager at Citigroup's Banamex unit in Mexico denied he was involved in abetting a corporate loan fraud involving oil pipeline maintenance company Oceanografia.

As reported by Reuters on July 21, Banamex is looking into how it lost more than $500 million from the lending to Oceanografia, and has zeroed in on Jose Ortega as a key figure, according to two people familiar with its probe. The sources said that Ortega changed employee manuals that the bank used when deciding whether to lend to Oceanografia and other companies that supply services to Mexican state oil company Pemex.

The changes resulted in loans to these companies receiving less scrutiny and therefore enabled fraudulent borrowing, the sources said. Ortega could not be reached to comment for that story.

Two days after that story was published, Ortega told Reuters in a statement that he never had the authority to change employee manuals on his own, and never made any changes in favor of any particular customer. He did not work at the bank while the fraudulent loans were made, he added.

"I have been unfairly mistreated by something that I did not participate in and that I did not have any knowledge about, because I had quit the bank more than a year previously," he said in his statement.

A spokesman for Citigroup declined to comment on the matter.

The Mexican banking regulator, Comision Nacional Bancaria y de Valores (CNBV), has poured scorn on the suggestion that Ortega was instrumental in the fraud, and says Ortega probably played only a bit part. The real problem was with the bank's institutional failure to have proper controls in place, CNBV President Jaime Gonzalez said in the July 21 story.

In that story, Reuters reported that in 2012 the Mexican bank fired Ortega for having an outside business relationship with Oceanografia, creating a conflict of interest, according to one of the two sources familiar with the bank's probe. Banamex had discovered that Ortega had received $200,000 from Oceanografia's CEO Amado Yanez, the source added. One of the two sources also said Ortega worked for Oceanografia as a consultant after leaving Banamex.

In Ortega's statement, he said that he resigned from the bank, and that he had never been an employee of Oceanografia or any other company run by Yanez.

On Friday, one of the sources said that Ortega was forced to resign.

Ortega also said in his statement that the $200,000 of payments were for an apartment and for art, which his wife Susana Sabines independently sold to Yanez. He added that his wife's dealings with Yanez never had any influence on his work at Banamex.

Sabines confirmed on Friday that she sold the apartment as well as some works of art to Yanez.

(Reporting by Elinor Comlay in Mexico City; Editing by Dan Wilchins and Martin Howell)