Uncle Sam swoops on Mexican banks

Senior executives of Bancomer in Mexico City are unlikely to forget the morning of May 18 when the call came through from the US justice department. Along with two other prominent Mexican financial institutions, and scores of bankers, Bancomer was being indicted on US conspiracy and money-laundering charges. Within a few hours, US treasury secretary Robert Rubin would announce the biggest ever federal money-laundering investigation - and the first US money-laundering indictments against legitimate foreign financial institutions.

Known as Operation Casablanca, the investigation took almost three years and was so circumspect it was done without the knowledge of Mexican public servants. Three big Mexican banks were indicted - Bancomer, Banca SerfIn, and Banca Confía. Bancomer and Serfín are the country's second- and third-largest banks. All three have significant foreign ownership stakes - held by the Bank of Montreal, HSBC and Citibank, respectively.

Ordered to desist

Twenty-six Mexican and five...