(Bloomberg) -- Citigroup Inc. is being investigated by US government agencies over its ties to a sanctioned Russian official, according to a person familiar with the matter.
The probe, by the Department of Justice, the FBI and the IRS, centers on Citigroup’s work for Heritage Trust, which holds assets owned by Suleiman Abusaidovich Kerimov, the person said, asking not to be identified discussing non-public information. Kerimov is a Russian billionaire the US has previously said profited from government corruption.
Part of the investigation is examining Citigroup’s anti-money-laundering policies and systems in place to prevent financial crimes, the person said.
Regulators have penalized Citigroup in recent years for shortcomings in its risk management and controls. In July, the Federal Reserve said the bank had made insufficient progress toward resolving a pair of consent orders it had received in 2020 and slapped it with $136 million in penalties.
“Citi is committed to conducting all business with the highest consideration for compliance with all applicable laws and regulations,” a spokesperson said in an emailed statement. “At the same time, we are actively ending nearly all of our institutional banking business in Russia, except for those operations necessary to fulfill remaining legal and regulatory obligations, while we proceed with the closing of our Russian consumer banking business.”
The fines once again highlighted the obstacles Chief Executive Officer Jane Fraser must overcome as she works to turn around the fourth-largest US bank by assets. Chief Financial Officer Mark Mason said last month that the company would increase its investment in the processes it has for regulatory reporting in the coming months.
Kerimov ranks No. 293 on the Bloomberg Billionaires Index, with a net worth of about $9.7 billion. The US has previously seized homes belonging to Kerimov and other Russian oligarchs.
Barron’s reported the existence of the Russian probe earlier Thursday. Citigroup’s links to Kerimov were reported in 2022 by the San Francisco Standard.
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