Wachovia Settles Money Laundering Case
Banking giant Wachovia has agreed to pay $160 million to settle a federal investigation into laundering of South American drug money. The deal, announced by the U.S. attorney in Miami, said the bank had laundered the money since at least 2003 using Mexican exchange houses.
LINDA WERTHEIMER, host:
Wachovia Bank is paying $160 million to settle a case involving money laundering and Columbian drug dealers.
From WLRN in Miami, Rick Stone reports.
RICK STONE: Wachovia's accused of failing to set up the Anti-Money Laundering safeguards required by the Bank Secrecy Act over a five-year period, prosecutors say. That allowed more than $420 billion to change hands unmonitored in transactions between Wachovia and Mexican currency exchange houses.
Miami U.S. attorney Jeffrey Sloman says some of the money helped the South American drug trade.
Mr. JEFFREY SLOMAN (Attorney): 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.
STONE: If Wachovia continues to comply with the Bank Secrecy Act, the federal prosecution will be dismissed a year from now. That could mean federal prosecutors consider it a crime of neglect rather than criminal intent.
Edward Rodriguez is a money laundering expert at Watkins Meegan.
Mr. EDWARD RODRIGUEZ (Anti-Money Laundering and Advisory Services, Watkins Meegan): They dont really prosecute the bank because they're such an intricate part to the community, unless the bank and everyone in the bank was dirty.
STONE: But prosecutors say it was a banking law violation on an historic scale and the action is intended to signal no tolerance for money laundering through U.S. banks.
Wachovia, in an email, refused to comment but acknowledged that its compliance programs were inadequate.
For NPR News, I'm Rick Stone in Miami.
Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.