Wachovia Now Being Investigated For Drug Money Laundering

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.

“Wachovia probed over drug-money laundering: report” [AFP]

“Wachovia To Pay $144 Million For Bilking “Gullible” Seniors”
(Photo: Adam Cole)


Edit Your Comment

  1. dragonfire81 says:

    My question is: How many other major banks are involved in this kind of activity?

    Because I really doubt wachovia is the only one.

  2. azntg says:

    Big money knows no fear nor does it care about anybody.

  3. Verklemptomaniac says:

    It’s never a good thing when your company is linked to drug-cartel money laundering front-page, above-the-fold in the Wall Street Journal. No amount of spin can clean up that kind of bad PR.

  4. zentec says:

    Maybe the government has been targeting the wrong folks in the pursuit of stopping terrorism. Instead of wire tapping private citizens, maybe they should just sit in the executive washroom and see where all the “new profit lines” are originating.

    I’m sure this was just legal enough and the executives had this at just a little more than an arm’s length to avoid direct prosecution, but the mere appearance of knowingly doing business with criminals is disturbing.

  5. @zentec: No, they can’t do that, it’s too much like right.

  6. Pro-Pain says:

    Legalize drugs maybe? I dunno…

  7. Juggernaut says:

    Does somebody just pull these scenarios from “Law and Order”? I could swear I saw this last month…

  8. Sean Robertson says:

    They don’t call them Walk-Over-Ya for nothing, folks!

    @Pro-Pain: Agreed, but sadly the popular perception of these issues has become so wildly distorted (Hey, thanks, Reagan! $&@#%!) that we may well NEVER fix it.

  9. BigNutty says:

    I think the Law and Order writers have access to investigations or get the story fist (I love that show.)

    I’m sure things go on in the banking industry and other big businesses that we can’t even imagine yet.

  10. Rectilinear Propagation says:

    Given the nature of the previous scandal I guess this one shouldn’t even be surprising.

    Crikey, how many customers are they gonna lose over this?!?!

  11. civicmon says:

    They have a very pathetic Corp Compliance dept if they continually have these problems.

    They don’t investigate the legitimacy of these clients? They don’t look at who they actually are? I know that’s not 100% but not doing so makes them an agent to the accused crime by facilitating it.