Matt Levine, Columnist

Citi Paid $400 Million in Fake Invoices

Also Mike Corbat "can assure you there will be accountability for those who perpetrated this despicable crime" and I hope he means he'll be providing that accountability personally.

February 28, 2014 at 6:22 PM UTC

By Matt Levine

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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As far as I can understand it from Citigroup's press release, which is not very far, here's how Oceanografia S.A. de C.V. took Citi's Mexican subsidiary, Banamex, for $400 million:

This went on for years? That to me is the oddest part. Oceanografia is -- somewhat obviously -- not a public company, but a random assortment of pseudo-comps suggest that typical accounts receivable turnover in the oil-services industry averages around three months.1One imagines that Pemex gets more breathing room than the average customer, but still, at some point, wouldn't Banamex call Oceanografia after not getting paid for a year or two? Did Oceanografia just say "yeah, I know, what jerks, they're really slow, keep trying"?2And Banamex kept extending more credit on more fake receivables, to a total amount of $585 million? And never called Pemex?