On January 12, 1996, 57 days after the Casta on arrest, 56-year-old Pie
announced he would
retire "during the year." On January 13, the New York Times reported: "The
departure of the
highly regarded executive was not expected and prompted concern by some banking
industry
analysts." A CS First Boston analyst was quoted: "I'm floored. Pei is the
earnings power of
Citibank...."
Howe declined to comment on whether Salinas had any transactions at Citibank.
He said the
personnel changes "had absolutely nothing to do with any allegation. It had
nothing to do with
Salinas whatsoever. It had to do with a general reorganization. A number of
positions changed at
that time." Citibank press releases in January 1996 documented several
personnel changes,
including Pei's.
Senior international bankers, who asked not to be quoted, say that it is
"virtually impossible" that
the chairman of a bank, even one of Citibank's size, not know about a new
customer who met the
Salinas characteristics.
Citibanker's 1994 Testimony: "Too risky not to do the due diligence"
United States vs. Antonio Giraldi
May 12, 1994
(Editor's Note: Amelia Grovas Elliott, a senior Citibank private banking
officer in New York,
from 1991 to 1993 managed the multi-million dollar transactions of Raul
Salinas, the brother of
then Mexican President Carlos Salinas. They involved deposits in a Swiss bank
affiliated with
Citibank and other institutions. The accounts bore false and front names used
by Salinas to hide
his identity. In 1994, Elliott testified as a star witness for the U.S.
government in the money
laundering prosecution of Antonio Giraldi, a private banking officer at
American Express Bank
International who previously worked for her at Citibank.
The following are extracts of her
testimony, before judge and jury, which helped convict Giraldi. He is appealing
his conviction
for which he received a 10-year prison sentence).
History with Citibank
Q: .. (W)hat (are) your duties are as vice-president at Citibank?
A: I head the Mexico team for the international private bank of the bank....
Since June of 83, so
11 years.
Q: (W)hat your duties... in that position?
A: I manage a team of 10 people with responsibilities... primarily to manage
accounts for Mexican
high net worth individuals.
Q: How do you define a high net worth individual?
A: Usually an individual who has a net worth of at least $5 million and that
has liquidity of at least
a million to invest with us.
"White gloved" banking
Q: What is international private banking?
A: Private banking is the area of the bank... that deals with clients with more
money than the
general public, that does it on a more white gloved kind of environment.... In
the private bank of a
bank, you are a name. The person knows you, knows who you are, knows your
family, they
recognize your voice.... (I)t is basically a more personalized kind of banking
relationship....
Q: ... (T)he laws which govern your conduct as an international private banker
are the same laws
that govern the conduct of bankers in the retail bank, commercial bank, the
domestic private bank,
they're the same laws, is that correct?
A: They're the laws, the banking laws, correct.
"High profile" clients
Q: Is it reasonable to assume that bank officers...such as yourself who have
extensive experience
with international private banking clients in Mexico would be more likely to
spot something
improper or to have a funny feeling about a prospective client than a
relatively inexperienced
relationship manager?
A: Yes.
Confidentiality for clients
Q: Are any of your international private banking clients concerned about the
confidentiality of
their holdings?
A: Most of them are.
Q: So that the Mexican government will not know?
A: Not so much the Mexican government - I don't know. I have never asked the
question of a
client. It's not - the Mexican government can know. A lot of my clients have
reported it to - when
they took the money out and continue to report it now and pay taxes there. A
lot of my clients
have taken money back and then reported their entire holdings outside....
Q: ...With respect to the issue of confidentiality..., would it be safe to say
that... one of the
concerns of international private banking for legitimate reasons - and I'm not
suggesting for a
moment that you would do anything for an improper purpose - is to conceal the
source or
ownership of a particular client's funds from people who have no reason to
know?
A: Yes.
Relationship with Mexican officials
Q: What is your level of trust with Mexican authority, do you trust Mexican
officials of any kind?
A: Some, some not.
Q: And how do you determine which you trust and which you don't?
A: If you get to know them and -- I mean, it's fairly obvious, I think. Mexican
officials are talked
about a great deal
Q: They have a history of becoming fabulously wealthy while in office, would
you agree?
A: Some....
Q: Does your team manage funds in some assets, regardless of the investment or
the fiduciary
vehicle, for former Mexican political leaders or their family members?
A: No.
Mexicans of sudden, large wealth
Q: ...(F)rom your decade or so of experience dealing with Mexico, are the
people... who have the
bulk of the wealth well-known in Mexico?
A: Yes, they are.
Q: Is it unusual for someone to appear in Mexico all of a sudden with a large
amount of wealth
that hasn't been previously known?
A: It can happen, ... Mexico is a very big country but, but the people who hold
the wealth, the
bulk of the wealth of the country are not a handful, but a number that is -...
manageable. And so,
... you have to either meet them or know of them or recognize the name. That is
not to say there
can't be others but, generally speaking it is a fairly tight and fairly small
upper crust.
Q: Have you ever accepted a client, heard of a client who said "I have $12
million I want to
invest, but I have not had prior banking relationships?"
A: No.
Q: Have you ever in your experience..., have you ever had a situation where a
wealthy person
gave you control of $2 or $3 million without having met you?
A: No.
Due diligence -- "The way we do things"
Q: ...Are you aware of any specific statute or regulation in the U.S. which
specifically requires a
bank who is in the processes of accepting a prospective client... to do any
particular amount of
due diligence or to follow any specific steps before they can accept the
client?
A: I don't know if it's a statute. I don't know if it's a law. I just know that
is the way we do
things.
Q: Precisely. Would you agree that the due diligence process developed - was
developed by the
banks to protect the banks?
A: Probably.
"It's too risky not to do the due diligence"
Q: Would you agree that the objective of the due diligence or "know your
client" policy is for the
bank to achieve some level of comfort with a prospective client before
accepting the client's funds
and engaging in a banking relationship?
A: ... It's too risky not to do the due diligence, not to know who you're
dealing with.
Citibank's "methodology"
Q: ...(I)n your... international private banking group..., how would a
relationship manager learn
that he or she had either cut a corner or shaved a little too close on the due
diligence process after
that had been brought to your attention?
A: The relationship manager would be discussing the prospective client with his
or her supervisor
throughout the entire process.... (I)t's a complex kind of sale, so it has a
fairly long, especially if
you're not... in Mexico, it has a fairly long lead time. You would be
discussing this with
somebody else, for no other reason just to check yourself. "So-and-so referred
this person to me.
This person does this and this. I have got to visit that person." ... And then
that person will say,
"Well you do this." So that's... the methodology that we use. So by the time
the client is
accepted, all those things have been basically ironed out....
Q: ...(D)idn't you describe yourself as being terribly conservative when you
were before the grand
jury?
A: .... When I was in front of the grand jury, I described myself as a
conservative investor.
Q: Conservative as an investor, inflexible as a --
A: Inflexible in the way I do things....
"Know Your Customer" as "part of the culture"
Q: Now, when you hired Mr. Giraldi and when this "know your customer," "know
your client,"
policy that you described was in effect, did you provide him with this
information, train him about
it and instruct him upon it?
A: ... The "know your client," at least in our bank, is part of the culture.
It's part of the way you
do things. It's part of the way you conduct yourself. If you come in with a
prospect and/or name
of a prospect, you will be sure to be asked, "Who is this person, what do they
do, who introduced
them to you," by at least three or four people higher than you. It's just the
way it is....
Q: And... your bank caused your international bankers to engage in extensive
efforts to know
your client before you accepted them?
A: Yes.
"Know Your Customer" -- Signature, background checks
Q: ...What's the purpose of having the bank officer verify the signature of the
customer?
A: The signature card is probably the most important document in a banking
relationship because
a relationship manager, such as what I do, knows the client and usually gets to
know the client's
voice, a client's signature, the client's everything....
Q: ...Now as part of this "know your customer"...policy, procedure..., is there
a requirement to
obtain bank references?
A: We require two bank references....
Q: Did you accept oral references or did you require written references?
A: We required written references.
"We remember birthdays"
Q: Is the "know your client" due diligence process, ... something that is
ongoing and continuing
or, once you have made the decision to accept a client, that's it, he's in or
she is in and you never
give your comfort level another thought?
A: ... We visit our clients 10 to 12 times a year in their country. They come
back three or four
times to New York. We see the clients a lot. It's obviously a growing kind of
thing and not just in
knowing your customer as (to) make sure you know what's going on, but because
the relationship
can grow deeper the more you know this person. This is why we go to their
homes, this is why
we visit with their family, this is why we go to their business, this is why we
remember birthdays.
It just increases the depth....
Q: ...You said that one of the things that you try to do in getting to know
your client and
exercising due diligence and following up with your client is that you
encourage your relationship
managers to try to visit them at their home.
A: At their home or their office, yes.
Q: And another thing... that you said you liked your relationship managers to
do is to get to know
everybody in the family.
A: Yes.
Q: Everybody from the wife, daughters or sons, to sisters and brother-in-laws
and things like that,
correct?
A: Sister and brother-in-laws if it's relevant, but certainly close members of
the family, yes.
Attraction of Swiss bank accounts
Q: Are you aware that there are people who find some attraction to Swiss bank
accounts --
A: Yes.
Q: -- or Swiss portfolios?
A: Yes, yes, for confidential reasons.
Q: Why do you believe that there is that perception or... feeling about
something being special
about Switzerland?
A: ... (B)ecause Switzerland is known for having numbered accounts. Switzerland
is known for
having... very strict confidential laws. Switzerland did have some law changes
in that - and we
have seen it - in that they will not maintain confidentiality anymore if there
is a criminal reason
and/or they've been asked to provide information. A Swiss banker can, in fact,
be put in jail if
they divulge the confidentiality of the name of an account....
----
Case No. CR B-93-028-51, So. Dis. Tex.
Before U.S. District Judge Filemon B. Vela, S. Dis. Tex.
Assistant U.S. Attorney: David Novak, Brownsville, Tex.
Attorney for Antonio Giraldi: Christopher L. Milner, Corpus Christi, Tex.
----------------------------------------
Role of Swiss Banker could Provide Salinas Link to Drug Money
The role that Joseph Oberholzer played in the movement of Raul Salinas's
multi-million dollar
accounts through Swiss banks in suspected collaboration with Citibank senior
private banker,
Amy Elliott, may answer the riddle of whether any of that money originated from
Mexican drug
traffickers.
Salinas enriched himself while his brother, Carlos, was President of Mexico.
He says the bulk of
an estimated $124 million was given to him for "investment" by Mexican tycoons
although he
provides no documentation.
Oberholzer , a 67-year-old Swiss banker who spent a long career at Union Bank
of Switzerland,
was the Swiss banker in the drug money laundering operation of Colombians,
Julio and Sheila
Nasser David, who were indicted by the U.S. in 1993. After her arrest in
Switzerland, Sheila
Nasser was extradited to the U.S., pleaded guilty and is serving a prison term.
Her husband is a
fugitive. About $150 million was forfeited by the Swiss in 1993.
Oberholzer was arrested, held briefly by the Swiss authorities and released
after a few weeks. He
is retired in Switzerland. No money laundering charges were brought against him
by the U.S. for
his role in the operation.
Swiss authorities are investigating Oberholzer's role in the transfer of
Salinas's funds to
Switzerland. Knowledgeable Mexican sources say he played an important role in
the Salinas
banking operations and was a close financial confidante of Salinas.
If no drug link is found, the Swiss may have difficulty forfeiting the money
unless the U.S. steps
in with its more ample laundering and forfeiture laws to lay claim under
U.S.-Swiss bilateral
agreements.
Obscure weapon in U.S. laundering law could confront Citibank
Allegations that Citibank officials administered multi-million dollar
transactions for Raul Salinas
with money he amassed by shaking down multinational corporations in Mexico and
possibly from
drug traffickers bring into play a little-used provision of the U.S. money
laundering law as it
applies to foreign official corruption.
While his brother was President of Mexico, Raul Salinas opened a customer
relationship at
Citibank in Mexico managed by Amelia Grovas Elliott, the head of the bank's
"Mexico team" in
New York. Salinas used false and front names to open accounts in Switzerland
with Elliott's help.
One Swiss account at a Swiss private bank, where Citibank is alleged to have
routed part of the
money, had $84 million on deposit. Other funds were held at a Citibank Swiss
affiliate, Confidas.
The U.S. money laundering law has "extra-territorial" reach if the
transactions are by a U.S.
citizen or, if by a non-U.S. citizen, they occurred in part in the U.S. The
known facts fit that
standard for Salinas and Citibank officers (Title 18, USC Sec. 1956(f)).
The key determination for U.S. prosecutors is whether the money "involved in
(the) financial
transaction" was the "proceeds of specified unlawful activity." Among the many
crimes defined as
"SUAs" are five strictly foreign crimes: extortion, narcotics, fraud against a
foreign bank,
kidnaping and robbery (Title 18, USC Sec. 1956(c)(7)(B)(I)-(iii)). Their
proceeds can be the basis
for a U.S. laundering prosecution even if the crime was committed outside the
U.S.
If the Salinas money that Citibank managed came from drug traffickers or from
extortionately-obtained payments in Mexico, and bank officials knew or were
"willfully blind" to its unlawful
origin, a laundering prosecution is possible if there was an intent to hide or
disguise the nature,
source, location or ownership of the money.
The main U.S. extortion law, the Hobbs Act, is used against corrupt U.S.
public officials who are
accused of the crime of "obtaining... property from another, with his consent,
induced by
wrongful use of actual or threatened... fear, or under color of official right"
(Title 18, USC Sec.
1951(b)(2)). Congress had it in mind when it included foreign extortion as an
SUA.
If these requirements are met, Salinas and Citibank officers could face
exposure to prosecution.
Citibank told Congress in 1989 of tight grip on foreign accounts
Citibank, under scrutiny by the Swiss, Mexican and U.S. governments for
transactions it
conducted for Raul Salinas, the brother of the former Mexican President, told a
U.S.
Congressional committee in 1989 that its money laundering controls worldwide
were a model of
good compliance.
"Citicorp is committed to compliance with both the letter and the spirit of
the law.... Citicorp
created a committee, comprised of ...personnel from all affected Citicorp
businesses, to monitor
the compliance network of the institution," Citibank lawyer Carl T. Solberg
told a Senate Foreign
Relations Subcommittee in 1989, the year after Salinas became President.
He said Citibank's foreign branches had adopted "the same standard of
customer and transaction
review which is placed on United States branches," explaining that "this
voluntarily imposed
compliance program, in place for a number of years, has as its foundation in
the fundamental
banking policy of know your customer.'"
He said the bank pioneered reporting suspicious transactions: "Citicorp
banking entities began
filing criminal referral reports for suspicious transactions in May 1987.... We
know of no other
major financial institution that implemented written procedures to govern the
reporting of
suspicious transactions at that time...."
-----------------------------
From the June 1996 issue of Money Laundering Alert:
"Mexican Drug Lord with Ties to Salinas Faces New U.S.
Indictment"
Federal prosecutors in Houston last month filed new charges against Mexican
drug lord, Juan
Garcia Abrego, who Mexico deported to the U.S. after his January arrest. Garcia
had been
indicted in absentia in 1993. The new charges supersede that indictment. He is
said to hold the
key to exposing the extensive Mexican government corruption during the
presidency of Carlos
Salinas that ended in December 1994. Raul Salinas, brother of the President, is
believed to have
maintained close ties to Garcia but no links to drug proceeds have been found
to date in the many
accounts around the world where Salinas accumulated as much as $250 million
during his
brother's presidency (MLA, April 1996).
The new money laundering and drug trafficking charges show he is not above
bribing public
officials. His drug cartel was said to spend $50 million a month in bribes to
public officials. One of
the recipients is believed to be Mario Ruiz Massieu, former Deputy Attorney
General of Mexico,
whose $9 million at the Texas Commerce Bank in Houston has been seized by the
U.S. (MLA,
July 1995).
The new indictment has no reference to Salinas or Massieu, but it does paint a
picture of a far-flung organization that used diverse tactics to move and
launder its millions. They included paying
$200,000 in bribes to an FBI special agent who posed as a corrupt federal
agent. The indictment
says Garcia maintained direct telephone contact with the undercover FBI agent
whose court
testimony in the upcoming trial is surely not anticipated with glee by
Garcia.
The indictment contains the novel allegation that Garcia's organization caused
a real estate title
company, Texas American Title Co., to file a false IRS Form 8300, the cash
reporting form that
trades and businesses must file when they receive more than $10,000 in cash.
There are similar
charges concerning cars that the ring bought from four automobile dealerships.
Those companies
were not charged (Case No. H-93-CR-167-3S, So. Dis. Tex.).
-----------------------------------
From the July 1996 issue of Money Laundering Alert:
"Court Expands Exposure of Private Bankers"
In a decision that will cause tremors in the private banking industry, the
U.S. 5th Circuit Court of
Appeals on June 19 upheld the money laundering conviction of a former private
banker for
American Express Bank International. The case led to the imposition of the
largest monetary
penalty ever imposed on a bank in a money laundering-related case. The
conviction of Antonio
Giraldi turned in large measure on "know-your-customer" issues.
In its ruling the court alludes to an inherent money laundering soft spot in
the private banking
field: "the pressure on international bankers to recruit new clients and the
concomitant
professional and monetary success that comes to those who are able to produce."
Private banking has recently become the focus of unwanted attention as a
result of the scandal
surrounding the movement of hundreds of millions of dollars of purportedly
ill-gotten money
belonging to Raul Salinas, the brother of former Mexican President Carlos
Salinas.
A star witness for the government in the Giraldi prosecution was Amy Elliot,
Giraldi's former
superior at Citibank. Elliot, who was the head of Citibank's private banking
"Mexico team," is
now at the center of a controversy over how the suspect fortune of her
customer, Raul Salinas,
moved through and was handled by Citibank (MLA, Apr. 1996).
In 1989, while working for Bankers Trust Co. in New York as an international
private banker in
the Mexico market, Antonio Giraldi recruited and serviced accounts of wealthy
Mexican
nationals. He was also responsible for screening potential clients to assure
that their wealth was
legitimate. Intentionally or not, Giraldi proved a failure at his
client-screening function.
That year, Giraldi recruited a new client, Ricardo Aguirre, who made an
initial deposit of $2
million. A few months later, Giraldi left Bankers Trust and went to work for
American Express
Bank International. Aguirre's accounts, which followed Giraldi to AEBI, grew
dramatically to
more than $21 million. Aguirre, whom Giraldi had never met before opening the
account, turned
out to be a money launderer for the Mexican drug cartel of Juan Garcia Abrego.
The U.S. money laundering law requires that the person "know" that the
"property involved in a
financial transaction represents the proceeds of some form of unlawful
activity" (Title 18, USC
Sec. 1956). Without proof of such knowledge, or of "willful blindness" of such
illicit origin, a
money laundering conviction cannot stand. During his month-long trial, Giraldi
tried to convince a
McAllen, Texas, jury that he didn't know Aguirre's money was dirty. He failed
and, together with
his co-worker Lourdes Reategui, was convicted. He was sentenced to 10 years in
prison.
In recent years, courts have recognized that a money laundering trial often
boils down to a single
inquiry of whether the defendant "knew" the source of the money was illicit.
Acknowledging that
there is rarely direct evidence of such knowledge, courts have uniformly held
that circumstantial
evidence is sufficient to prove knowledge. And, if a defendant consciously
avoids knowledge of
facts that would provide the requisite knowledge, his "willful blindness" won't
provide a safe
harbor. Courts often equate "willful blindness" with actual knowledge in a
money laundering
prosecution.
Giraldi contended on appeal that the evidence at trial was insufficient to
establish that he knew
Aguirre's funds were drug money. He argued that there was no direct evidence
that he knew the
money was from drugs and that all the government really proved was that he was
negligent in not
discovering the illicit source of the cash. At most, he argued, the government
had proved that he
"should have known" the money was dirty. He said such evidence was not enough
to sustain his
conviction. Calling it a "close case," the appellate court held that Giraldi's
contention didn't fly.
Circuit Judge Parker, writing for the court, reasoned that the evidence was
more than enough for
the jury to find that Giraldi knew, or was willfully blind to, the source of
Aguirre's funds.
(Case No. 94-60602, 5th Cir. Ct App.)
Giraldi is not the only one paying for his transgressions. American Express
Bank International
was held civilly liable and paid $35.2 million in forfeitures, civil fines and
penalties, the largest
settlement on record in a money laundering case (MLA, Dec. 1994).
---David S. Mandel, a member of MLA's Editorial Board of Advisors, is Of
Counsel to the
international law firm of Morgan, Lewis & Bockius LLP. He directs the Miami
office's
Corporate Investigations and Criminal Defense Practice Group.
-----------------------------------------
From the August 1996 issue of Money Laundering Alert:
FinCEN's Morris speaks on merits of Salinas-Citibank case
In the first public statement by a United States official on the merits of the
Raul Salinas-Citibank
case, Stanley E. Morris, director of the U.S. Treasury Department's Financial
Crimes
Enforcement Network, said to La Jornada, a prominent Mexican newspaper: "We
have not
identified the violation of any specified unlawful activity on the part of Raul
Salinas. The fact that
there was money in an account, in multiple accounts in the United States, is
not a crime."
Interviewed by that newspaper in Washington for articles that appeared on June
25 and 29,
Morris said the U.S. criminal investigation of that affair could last "up to
one year, or maybe
more."
He said the fact that Salinas, brother of former Mexican President Carlos
Salinas, is in jail in
Mexico for "inexplicable enrichment" is not a crime in the U.S. If Salinas is
"accused" of
committing a "specified unlawful activity," a U.S. bank involved in the
transfer of his funds could
be accused of money laundering only if it "knowingly assisted and promoted a
criminal activity"
or did not comply with a banking regulation, he said.
He added that Citibank has operated in Mexico for many years and has firm
procedures in place
to assure that it complies with U.S. regulations.
Morris said FinCEN has had a team in Mexico "to help the Mexican government
improve its
procedures for detecting money laundering."
---------------
From the November 1996 issue of Money Laundering Alert:
"Conviction of Drug Lord Aids Salinas Inquiry"
Juan Garcia Abrego, the drug lord who can answer the question whether his
unfettered reign
over drug trafficking in Mexico during the six-year term of former Mexican
President Carlos
Salinas was achieved with payoffs to the president's brother, Raul, was
convicted in a McAllen,
Texas, federal court last month on 22 money laundering and drug trafficking
charges.
He faces a life prison term - unless he decides to talk. His option of
providing "substantial
cooperation" and thereby reducing his prison term runs for one year from the
time he is sentenced
next January. Raul Salinas maintained close ties to Garcia Abrego.
Garcia Abrego lived by terror and by payoffs to friends in high office. One of
them was the
deputy attorney general under Salinas, Javier Coello Trejo, who received $1.5
million per month
from Garcia Abrego.
The trial was followed with great interest by Justice Department officials in
Washington and New
York who are investigating possible money laundering by Raul Salinas through
U.S. financial
institutions, including Citibank. Salinas maintained close ties to Garcia but
no links to drug
proceeds have yet been found in the many accounts around the world, including
several at
Citibank facilities, where Salinas accumulated as much as $250 million during
his brother's
presidency (MLA, April 1996).
There are persistent, though still unproved, reports that the U.S. government
has witnesses in the
wings who can establish that some of the massive wealth Salinas accumulated
during his brother's
presidency came from Garcia Abrego. There has been close coordination between
officials in
Washington and Texas, which was also the venue of the 1994 trial of two
American Express Bank
International private bankers who were convicted of laundering drug proceeds
for one of Garcia
Abrego's money launderers.
If drug proceeds can be shown to have formed part of the money that U.S.
financial institutions
handled for Salinas it would establish a crucial link required for a U.S. money
laundering
prosecution: that his transactions included the proceeds of narcotics
trafficking, a "specified
unlawful activity" under the laundering law (MLA, Jan. 1996).
Federal prosecutor Melissa Annis, chief of the Houston U.S. Attorney's Drug
Task Force, who
led the month-long trial of Garcia Abrego, said: "The jury got to see a picture
of all the cocaine
coming into the U.S. and heard from the guys who took all the money back south
and brought the
money back, much of it properly declared on the Customs CMIR form.
The cooperation of the
Mexican government was extremely important. It is a signal to anyone hiding
from us that they're
not above getting captured, expelled and prosecuted. We have taken the head off
the octopus and
obliterated his organization."
Garcia Abrego was said to spend $50 million a month in bribes to public
officials. A crucial
witness was an undercover FBI agent, Claude de la O, who gained the confidence
of Garcia
Abrego while posing as a corrupt agent, took $200,000 in purported bribes (Case
No. H-93-CR-167-3S, So. Dis. Tex.).
------------------------
From the December 1996 issue of Money Laundering Alert:
"Banker Seeks New Trial Saying Salinas Banker Lied about KYC"
The landmark money laundering cases involving Raul Salinas, Juan Garcia Abrego
and Antonio
Giraldi, which are becoming increasingly interrelated, took another strange
turn last month.
Giraldi, a former private banker with American Express Bank International who
was convicted in
June 1994 of laundering drug proceeds for the Mexican drug cartel of Garcia
Abrego through his
bank customer, Ricardo Aguirre, asked for a new trial alleging that Amy
Elliott, who testified
against him as a government witness, lied about the "know your customer"
procedures that she
and her bank followed with their private banking customers.
Elliott, a 29-year Citibank employee and a senior private banking officer, was
Giraldi's superior
at Citibank in the mid-1980s. She was also the private banker of Raul Salinas,
brother of the
former president of Mexico. With Elliott's help, Salinas established accounts
throughout the
world under circumstances that Giraldi says fatally contradict the strict "know
your customer"
procedures she said she followed "fairly inflexibly" for wealthy foreign
private banking customers.
In his motion, Giraldi says that only recent news stories, including a
segment on "60 Minutes,"
about the apparent lapses by Elliott and Citibank in the handling of Salinas's
money brought to
light the contradictions with the way she described, at his trial, the
meticulous care that she and
Citibank took in learning a customer's background. The "newly discovered
evidence clearly
demonstrates the falsity of Ms. Elliott's testimony" at his trial, says
Giraldi.
"(I)f Ms. Elliott, one of the most senior and experienced international
private bankers in the
industry, with extensive experience in Mexico and personal familiarity with
Mexico's wealthy
upper crust,' could be maneuvered by a clever and attractive prospective
international banking
client like Mr. Salinas, then it would have been much easier for a relative
beginner like Giraldi to
have been maneuvered by Aguirre in a regulatory climate three years less
intense," argues
Giraldi's lawyer, Christopher L. Milner, of Dallas.
Evidence of Elliott's conduct in connection with the Salinas accounts "if
shared with the jury...
would have easily tipped the scales in... Giraldi's favor," says the former
banker's lawyer.
Federal District Judge Filemon B. Vela will decide whether to grant a new
trial or hold an
evidentiary hearing before so deciding or do nothing. First, he will have to
consider the
government's response to Giraldi's motion.
On December 6, Charles Dause, one of the prosecutors who tried Giraldi, filed
a response which
says:
