Wachovia, you old rascal! As soon as you wrap up one unsavory scandal, a new possible scandal comes to light. U.S. justice authorities are investigating the bank for possible money laundering through Mexican and Colombian money-transfer businesses. The Wall Street Journal reported on Saturday that “the bank is possibly facing a deferred-prosecution agreement with the US Department of Justice that would subject it to ‘extensive federal oversight,’” but Wachovia denies that any such discussion has taken place.
The money-transfer businesses, or casas de cambio, are commonly used by people in the U.S. to send money back to family members in Latin America, but the Justice Department suspects the popular businesses are also used by drug traffickers to shuttle money from U.S. drug sales to drug cartels in Mexico.
“Internal emails and documents filed in federal courts in Miami, Chicago and New York describe former ties between Wachovia and money-changing firms,” the Journal said.
It said Miami court documents show that US agents have seized over 11 million dollars in 23 Wachovia accounts that belonged to the Mexican chain Casa de Cambio Puebla. US authorities suspected the money was the laundered funds of a drugs syndicate.
The probe into Wachovia is part of a larger investigation into money laundering by drug cartels through the money transfer firms that involves both US and Mexican authorities.
Wachovia says it stopped doing business with the casas de cambio at the end of 2007.
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(Photo: Adam Cole)