Wednesday, June 30, 2010
Michael Smith, Bloomberg, 
Submitted by: Editor

U.S. Banks Laundering Cash For Mexican Drug Cartels

Bloomberg Markets magazine reports in its August 2010 issue that laundered funds transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., among many others, have helped finance Mexican drug cartels.

Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers.

Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history -- a sum equal to one-third of Mexico’s current gross domestic product. No bank has been more closely connected with Mexican money laundering than Wachovia. 

“Bank of America takes its anti-money-laundering responsibilities very seriously,” says Bank of America spokeswoman, Shirley Norton.

Federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009.

No big U.S. bank -- Wells Fargo included -- has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again. Large banks are protected from indictments by a variant of the too-big-to-fail theory.

And, CEO's walk away with hundreds of millions of dollars in yearly bonuses.


This is a fascinating article. Click below to read the story on Bloomberg.

Posted by Editor on 06/30/10 at 01:39 PM •  (1) Comments

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