American Banks 'High' On Drug Money: How a Whistleblower Blew the Lid Off Wachovia-Drug Cartel Money Laundering Scheme
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Following these findings a slew of federal charges filed in 2009 by Federal prosecutors in Florida hit Wachovia with the largest violation of the Bank Secrecy Act in U.S. history.
Douglas Edwards, senior vice president of Wachovia Bank confessed they didn't do enough to spot illicit funds in handling the $378.4 billions for the Mexico's Casa Cambios. But Edwards declined to answer specific questions including how much they earned for handling the billions of dollars for the currency operation.
Overall, the amount of drug proceeds ($378 billion dollars) that the CDC deposited into Wachovia Bank actually equaled one third of Mexico's entire $1.4 trillion dollar annual GDP.
As part of the agreement Wachovia agreed to pay the government a fine of $110 million dollars with an additional fine of $50 million dollars to be paid to the U.S. Treasury Department. The total fine of $160 million dollars was less than 2% of the bank's $12.3 billion dollars in profit made in 2009. By the time Wachovia agreed to pay the hefty fine, Wells Fargo purchased Wachovia during the banking crisis for $12.7 billion. Then Well Fargo reaped a windfall from the government, a gift of $25 billion dollars of taxpayers money as part of President Obama stimulus package in 2009.
"Today, we announce the deferred prosecution of Wachovia, one of the largest banks in the United States, said U.S. Jeffrey Sloman on March 12, 2010. "Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations by laundering drug proceeds."
Sloman further stated, "as this case demonstrates, financial institutions---no matter how large will be held accountable when they allow 'dirty' money to pollute the U.S. banking system."
The Wachovia scandal sent fears into the banking industry among prominent members because now they suspected the Feds would crack down more heavily against foreign customers, particularly Mexico.
In an interview with a Daily Business Review reporter, International Banking Attroney Clemente Vazquez-Bello, said, "The concern, obviously, in the industry is are we going to pay for the sins of Wachovia. ... It's mind-boggling beyond comprehension that in the compliance world that an institution of their size and stature would have permitted these enormous deficiencies."
Mexico Drug Cartel
Mexican drug lords are among the world's most dangerous and wanted criminals. They are savage, rich, notorious for violence, and transport massive shipments of narcotics into the United States and throughout the world. They profit billions from the prohibitionist drug policies of the U.S. government.
When Mexico president Felipe Calderon took office in December, 2006, he immediately ordered the armed forces to kill or capture the cartels including their members and associates. So far, the unrelenting violence has killed more than 35,000 people, with 15,000 last year. Overall, the stark reality in this ongoing brutal and sadistic violence has failed to stem the drug war.
The tremendous amount of proceeds that the CDC transferred in-and-out of Wachovia bank raise a provocative question: How do Mexican cartels get their money into American banks? Either banking officials were asleep at the wheel or tacitly ignored the shady business going on to boost profits for themselves.
"The failure of U.S. banks to take adequate steps to prevent money laundering is a widespread and ongoing problem," said Michigan U.S. Senator Carl Levin in February 2010.
Investigative journalist Daniel Hopsicker wrote stories about the Wachovia drug cartel scandal on his website. Hopsicker's investigation uncovered the fact that the airplanes that were busted with cocaine and purchased through Wachovia with illegal drug funds, previously had a steamy relationship with CIA and National Defense contractors.