A Bloomberg report reveals how a Mexican bank employee directed a retirement fraud scheme at American retirees living in San Miguel de Allende, a city in Mexico's central highlands.
Monex Casa de Bolsa SA de CV Monex Grupo Financiero has been investigating allegations that an employee stole approximately $40 million from American clients.
Marcela Zavala Taylor, the suspected Monex banker at the center of the fraud, allegedly sent American clients falsified statements that showed their accounts were fully funded, said several of the bank's clients in a Bloomberg interview.
The fraud was discovered in late December when clients couldn't retrieve funds from their accounts. Bank officials told clients that $40 million in funds from 158 accounts disappeared.
Bloomberg spoke with several clients who said Monex attempted to reach settlements at a massive discount versus what was stolen from their accounts. Others said the bank asked them to file charges against Zavala.
"Legal action is continuing in the case, and details cannot be disclosed so as not to hinder the investigation," Monex said in a statement. Bank spokeswoman Eva Gutierrez said Monex is working with affected clients and has settled with 70% of them.
Kenneth Karger, a retiree from Texas with property in Mexico, says Monex stole $400,000 from him. It was only last summer when he stopped receiving statements. Karger said, Zavala at the time, told him Monex was transitioning onto a new online banking system, and the account balance would be delayed for some time. Months later, Karger retrieved statements from Monex and discovered unauthorized withdrawals.
Bruce Brown, an Australian retiree who'd lost $250,000, was refunded entirely by the bank after he notified Mexican authorities.
Monex is an affiliate of Banco Monex SA Institución de Banca Múltiple Monex Grupo Financiero, with $5.2 billion in assets under management and operations in the US.
According to Condusef, Mexico's consumer protection agency, there were 7.3 million complaints of financial fraud involving 18.9 billion pesos (about $1 billion) last year.
The scandal has devastated the expatriate community in San Miguel, as non-citizens have limited rights.