PhillyTablet Inquirer Daily News
Mobile
Home Delivery
philly.com
email
font size
options
 
Monday, April 4, 2011

How Wachovia Bank helped Mexico's killer drug mobs

The shameful story of the former Wachovia Bank's support for murderous Mexican drug traffickers, and its slap-on-the-wrist punishment by US regulators, has been told before, but Britain's Guardian newspaper tells it well, and in detail. Excerpt:

"On 10 April 2006, a DC-9 jet landed in... Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m.

"But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel.

"During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo," and the dominant bank in Philadelphia and other East Coast cities.

"Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

"Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court... The bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

"'Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,' said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009."


Posted by Joseph N. DiStefano @ 11:16 AM  Permalink | 4 comments
Comments   
  • 0 like this / 0 don't   •   Posted 1:31 PM, 04/04/2011
    And this surprises us, why?
    — sky173
  • 0 like this / 0 don't   •   Posted 1:51 PM, 04/04/2011
    Big banks own the US government. It is a major injustice to the American people and American taxpayers that a private banking cartel, which includes the FED, has the sole power of money creation.
    — jp8899
  • 0 like this / 0 don't   •   Posted 1:59 PM, 04/04/2011
    this was 'news' late last June:

    http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html
    — 1972bline
  • 0 like this / 0 don't   •   Posted 2:01 PM, 04/04/2011
    Yes 1972, and if you check the links in my item you'll see that Bloomberg story linked there, too, where I wrote about it last year. The Guardian story is a lot longer and adds detail. Enjoy. Joe D.
    — Joe D


4 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
Advertise Here