Saturday, March 20, 2010
(photo: Soseisthehood)
The U.S. Department of Justice has convinced Wachovia bank to pay the government $160 million for allowing its foreign exchange houses in Mexico to launder drug money.
Wachovia, now owned by Wells Fargo, admitted to permitting $110 million to be wired from the U.S. to south of the border from 2004-2007 to buy aircraft for drug cartels. But the laundering may have been even greater, according to the Drug Enforcement Administration, which claimed Wachovia failed to keep track of $420 billion in transactions by Mexican exchange houses.
The $160 million fine represents the biggest penalty ever imposed under the Bank Secrecy Act, which requires financial institutions to carefully track transactions to detect suspicious activity.
Jeffrey H. Sloman, the U.S. Attorney whose Southern District of Florida office led the investigation, said, "Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations by laundering at least $110 million in drug proceeds. Corporate citizens, no matter how big or powerful, must be held accountable for their actions."
-Noel Brinkerhoff, David Wallechinsky
Wachovia Settles Money-Laundering Case (by Evan Perez and Carrick Mollenkamp, Wall Street Journal)
Wachovia to Pay $160 Million to End Laundering Probe (by David Voreacos, Bloomberg)
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