The Bloomberg Markets magazine’s August issue will highlight the other profiteers of the drug cartels business beside the cartels themselves and those are U.S. banks. Specifically a nearly 2-year investigation found Wachovia and Bank of America had violated the U.S. Bank Secrecy Act by not executing anti-laundering practices effectively. It appears Wachovia knowingly accepted funds from sources that were questionable even after being warned by insiders about drug laundering suspicions.
Wachovia, which is now owned by Wells Fargo, accepted a plea agreement that consists of a $160 million fine and admitting to not properly monitoring suspicious transactions. The federal probe shows Wachovia conducted business with Mexican money exchanges to the tune of $125 billion/ year. During the period from 2004 through 2007, Wachovia handled $378 billion from exchanges and profited $12.9 billion. Washovia was not asked to return all of those profits nor was it charged with a criminal act.
Meanwhile in Mexico many money exchangers are being closed down and prosecuted for money laundering. The Mexican government which has not charged any U.S. bank with wrong doing has indicated that Citigroup and Bank of America were also exchanging cash from money exchanges. This is not the first time U.S. financial institutions have been charged with faulty anti-laundering practices. Most recently in February of this year, Western Union was fined $94 million to settle charges in Arizona it was moving illegal funds through its system.
The Bank Secrecy Act has been around since 1970 and no bank has ever been indicted, convicted or gone to jail for laundering drug cartel funds.