- In October 2018, Deloitte Mexico auditor Ricardo Garcia Chagoyan received a minimum 2-year ban from auditing US publicly traded firms, for misrepresenting the audit of payroll lender Prestaciones Finmart
- In March 2019, Garcia Chagoyan signed an audit opinion overseeing Chedraui-controlled financial services company Factoring Corporativo listed on the Mexican Bolsa de Valores
- Garcia Chagoyan was also a longtime key auditor for the main payday lending arms of the Chedrauis’ Grupo Consupago until early 2018
Los Angeles, August 7, 2019 — US regulators imposed a minimum 2-year ban on Deloitte Mexico partner Ricardo Garcia Chagoyan from auditing companies listed on US stock exchanges, effective October 2018. Garcia and two others had misrepresented that they performed tests they actually failed to conduct in an audit of Prestaciones Finmart, a company unrelated to the Chedrauis and a subsidiary of a firm listed on the US stock exchange. Five months after his ban started, Garcia Chagoyan did work for the Chedraui-controlled financial services company Factoring Corporativo, which incorporated Garcia’s audit opinion letter (which was signed March 2019) into its annual financial statement to investors trading Factoring’s corporate debt on the Mexican stock exchange.
Garcia Chagoyan, who long served as a key auditor for payday lender subsidiaries of the Chedraui’s Grupo Consupago, was one of three partners at Deloitte Mexico (also known as Galaz Yamazaki Ruiz Urquiza S.C.) who were censured for violating US audit rules and standards while auditing Prestaciones Finmart, a company that made payday loans to Mexican government employees deducted directly from their paychecks. For misrepresenting that they had performed audit procedures on Prestaciones Finmart which they had not, in fact, done, the three were banned from associating with any registered accounting agency, and assessed $130,000 altogether in civil penalties.
US regulators found that Garcia Chagoyan failed to test all but one of 28 separate financial controls listed in an audit memorandum he approved and signed, despite knowing that the tests had not been performed for Prestaciones Finmart’s 2013 fiscal year. The audit memorandum falsely affirmed that Deloitte Mexico had tested all 28 controls.
Five months after Garcia Chagoyan’s ban from auditing US publicly traded firms started, Factoring Corporativo, a financial services company based in Mexico and controlled by the Chedraui family, incorporated Garcia’s audit opinion letter into its annual financial statement. The corporate debt for Factoring Corporativo is listed on the Mexican stock exchange, and the audit letter is an integral part of Factoring’s annual statements to investors.
Garcia Chagoyan also has served as a longtime key auditor for the main payday lending subsidiaries of the Chedrauis’ Grupo Consupago: Consubanco SA de CV, Opcipres SA de CV, and Consupago SA de CV. Garcia Chagoyan signed audit opinions for the Grupo Consupago subsidiaries as recently as March 2018 (for the 2017 fiscal year) and earlier, in some cases covering the period back to 2012.
Members of the Chedraui Obeso family make up one of two controlling shareholders at payday lender Grupo Consupago. Members of the Chedraui Obeso family also own a majority of supermarket chain Grupo Comercial Chedraui, which operates the El Super chain of grocery stores in the United States.
ChedrauiLeaks.org is a project of the United Food and Commercial Workers (UFCW) to investigate the connections between the Chedraui family and other Mexican elites as well as their links to business and property in the United States, the business and political activities of Mexican elites generally, and provide information about the struggle of El Super workers for a better life. El Super is owned by Bodega Latina Corporation, a subsidiary of Grupo Comercial Chedraui, S.A.B de C.V. The UFCW estimates it represents 200,000 US workers who are eligible to vote in Mexican elections.
Factoring Corporativo Audited Financial Statements for 2018 and 2017 (Independent Auditor’s Report signed March 26, 2019):
Excerpts: García Chagoyán signatures on Independent Auditors’ Reports for Grupo Consupago subsidiaries