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American Banks 'High' On Drug Money: How a Whistleblower Blew the Lid Off Wachovia-Drug Cartel Money Laundering Scheme

A fraud investigator helped expose the shocking world of multi-billion dollar drug laundering by American banks and the surprising lack of oversight by the Feds.

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Hopsicker gave the low down on the second airplane. "The Gulfstream was -- or had been -- a CIA plane. And the officers of Skyway Aircraft which owned the airplanes included former CIA and NSA (National Security Agency) operatives."

"One would think an important story of this magnitude would make headlines in every American newspaper and major TV networks including cable programs. But none of the prominent news media outlats reported the story of the U.S. registered aircrafts caught with the narcotics."

Hopsicker concluded, "with the exception of several stories written by Tampa Tribunereporter Howard Altman, those embarrasing details received zero exposure in America's mainstream media." Hopsicker also pointed out that Bloomberg Magazine reporter Michael Smith who wrote an extensive article about Wachovia's sordid history of laundering drug money for Mexican drug cartels did little to inspire interest.

"My investigation into the airplanes further uncovered a paper trail of FAA registration documents that revealed hidden connections between Mexico's Sinaloa cartel, Wachovia Bank and their American partners: people who the DEA insists don't exist: "The American Drug Lords."

Greed and Corruption: A Continuing Criminal Enterprise

A confession by Wachovia Bank executives last year indicating they laundered billions of dollars in drug money for the CDC was historic, and highly revealing of their approach to business. The executives had already been warned by U.S. Treasury Department of the serious risks associated with the CDCs.

As early as June 2004, the Treasury Department and banking regulators sent letters to U.S. banks indicating that the CDCs' were illegal money laundering operations; the letter appeared to encourage, not dissuade Wachovia from going after the CDC's drug tainted money.

In the legal agreement, Wachovia confessed to taking over other large banks after terminating their contract with Mexico-based CDCs' based on warnings from FBI, DEA and Treasury Department. Despite repeated warnings, Wachovia washed the bloody profits belonging to Mexican drug cartels to take their own cut.

To fill the void left behind by other competing banks who maintained business accounts for the CDC, Wachovia executed a clever scheme. In September 2005, Wachovia purchased the "rights" to solicit the international banking customers of Union Bank of California (UBOC).

The UBOC had backed off from doing business with the CDCs after warning letters from the Treasury Department. Wachovia wooed the CDC customers of UBOC into doing business with Wachovia although UBOC had already paid the government a fine of $31.6 million dollars for laundering over $20 million dollars in drug money for a Mexico-based currrency operation called Ribadeo Casa.

Once UBOC ceased the CDC operation, Wachovia "sweeten the deal" by hiring a former UBOC manager who previously supervised the CDC accounts and the manager even helped Wachovia's Miami branch to set up the structure of wire transfers. This under-the-table scheme increased Wachovia's business volume with the regular CDC customers.

Under Deferred Prosecution Agreement, here is an additional list of Federal Banking rules and laws that Wachovia also apparently violated to wash billions in profits:

(1) Pursuant to Title 31, U.S. Code, Section 5318, Wachovia failed to establish and maintain an anti-money laundering (AML) compliance program which provides internal policies, procedures and controls designed to guard against money laundering.

(2) Under same Federal Statue, Wachovia failed to implement risk-based programs to verify and record the identity of customers, like the Mexico-based CDCs'. If Wachovia officials would have properly complied with their own AML procedures they would have traced the origins of the CDCs' suspicious transactions, first reported by whistleblower Martin Woods.

(3) Wachovia was also required, Pursuant to rule 31, U.S. code, to file 'suspicious activity report' called the "SAR" with U.S. Treasury Department. But when investigator Woods filed SARs', he was demonized, bullied, and demoted in rank by Wachovia management.