Wachovia, Money Laundering and the Cartels

The Guardian has a new investigative report on Wachovia Bank's laundering of billions of dollars for Mexican drug cartels. The information comes from the federal criminal prosecution of Wachovia in Florida that was settled in 2010, and background from a British whistle-blower.

As the violence spread, billions of dollars of cartel cash began to seep into the global financial system. But a special investigation by the Observer reveals how the increasingly frantic warnings of one London whistleblower were ignored

The Government charged Wachovia with failing to maintain an effective money laundering program. Wachovia entered a one year deferred prosecution agreement with the Government in March, 2010. It forfeited $110 million and paid a $50 million fine. You can read the agreement here. No individuals were charged. [More...]

From the Guardian:

Now that the year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor.

Wells Fargo acquired Wachovia in 2008, and while it was not involved in the unlawful activity, the Guardian says it paid the tab for Wachovia. The agreement says there is no evidence that Wells Fargo's money laundering program is deficient.

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    Yawn..... (none / 0) (#1)
    by NYShooter on Sun Apr 03, 2011 at 11:14:01 PM EST
    Bank launders billions in drug money, gets caught, Company pays fine....

    Senior sells a percocet to buy food, gets caught, dies in prison.

    All's well in the "new, improved America."