Wachovia regularly helped move money for Mexican drug cartels, the bank's parent, Wells Fargo, has admitted in a deal with federal prosecutors, Bloomberg Markets magazine reports in its August issue
The deal, struck in March, "sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years," Bloomberg writes.
Wachovia, which San Francisco-based Wells Fargo bought in 2008 amid the financial crisis, 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," according to Bloomberg.
"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," Jeffrey Sloman, the federal prosecutor who handled the case, told Bloomberg.
Bloomberg tells how Mexican soldiers seized a DC-9 jet after it landed in April 2006 at the international airport in Ciudad del Carmen, 500 miles east of Mexico City: "They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found."
They also found that the smugglers had bought the jet with laundered funds they transferred through Wachovia and Bank of America, both headquartered in Charlotte, N.C. The plane was one of four that narcotraffickers bought and used to ship a total of 22 tons of cocaine.
People working for Mexican cartels deposited illegal funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009, and Mexican drug dealers used shell companies to open accounts at HSBC Holdings, Europe's biggest bank by assets, U.S. and Mexican prosecutors found. But neither bank was accused of wrongdoing. Spokespeople for the banks said laws prevent them from discussing the cases.
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