Wachovia Complicit In Laundering Mexican Drug Money

The Guardian in the United Kingdom wrote an extensive piece uncovering that Wachovia Bank, now a part of Wells Fargo, helped drug cartels in Mexico launder beaucoup bucks in order to fund their operations and do things like buy planes. The Drug Enforcement Administration, IRS and other federal agencies investigated the bank for almost two years. Here’s an excerpt:

The authorities uncovered billions of dollars in wire transfers, traveller’s cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. 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.

And the article goes on to explain that the fine was paltry, Wells Fargo acquired the bank during part of that whole banking crisis and everyone forgot, meanwhile a bunch of Mexican lives were lost. The article is excellent and worth reading, check it out here.