"[One Mexican bank]'s attorney argued that stiff penalties for money- laundering can result in a bank's 'inability to raise money in the international capital markets -- the ultimate death penalty for a bank.' "' Source: Mexico Banks Did Launder By MICHAEL WHITE .c The Associated Press LOS ANGELES (AP) -- Two of Mexico's biggest banks agreed to plead guilty today to laundering millions of dollars in drug money in a case that has strained relations between the United States and its southern neighbor, a source said. Grupo Financiero Bancomer S.A. and Grupo Financiero Serfin S.A. will each pay $500,000 in criminal fines. Bancomer also will forfeit about $9.4 million in money seized by authorities. Serfin will forfeit about $4.2 million in seized money, according to a source familiar with the case. Prosecutors planned to drop charges against a third Mexican financial institution, Banca Confia. Confia, which sold most of its assets to Citibank after it was indicted, agreed to forfeit $12.1 million seized from its U.S. holdings. The money is part of $100 million seized from 14 banks and dozens of individuals in Operation Casablanca, a three-year investigation of money laundering activities of Colombia's Cali drug cartel and the Juarez cartel in Mexico. Federal prosecutors say tens of millions of dollars in drug profits were laundered through phony transactions to Mexican-owned banks to conceal their origin. The banks had denied wrongdoing, saying any illegal activity was committed by rogue employees. Attorneys for Bancomer and Serfin were scheduled to enter pleas this afternoon in a hearing before U.S. District Judge Lourdes Baird. The plea agreement, originally reported by the Los Angeles Times and New York Times, doesn't end the case. Jury selection started Monday for six Mexican bankers and businessmen charged in the case. Prosecutors also are working out a civil settlement with Banco Industrial Venezuela, one of two Venezuelan banks implicated in the case. Similar civil actions may be filed against other banks where funds were seized, the source said. The operation raised tension between the United States and Mexico when agents arrested 167 people, including top Mexican bankers and executives. Mexico accused the United States of intruding on Mexican sovereignty by conducting a sting operation without its involvement. Bancomer and Serfin, Mexico's second- and third-largest banks, still face possible hearings before the Federal Reserve Board to decide whether they will be allowed to continue to operate in the United States. Banca Serfin's attorney has said the loss of a license could also result in a bank's ``inability to raise money in the international capital markets which would be the ultimate death penalty.''
