American Banks 'High' On Drug Money: How a Whistleblower Blew the Lid Off Wachovia-Drug Cartel Money Laundering Scheme
Continued from previous page
Therefore we must question why bank executives and corporate CEOs' rarely face criminal indictments. And if by chance a series of criminal indictments are handed down the ripple effect of the massive injuries and loss of investor's funds outweigh the civil penalties and fines levied against the 'big wigs.'
A recent Associated Press story provides a penetrating insight into the broader picture illustrating the mindset of prosecutors regarding whether or not to pursue prosecutions in major white collar crimes.
According to prosecutors attending Florida's Anti-money Laundering Conference this past March, the lack of prosecutions of executives and CEOs' boils down to standards of proof to deal with the case criminally or civil.
"You don't find the smoking gun email where an executive said," "I know it's drug money but go do it anyway," New York federal prosecutor Evan Weitz told the AP reporter.
Bypassing criminal charges the prosecutors usually hit a bank with a civil indictment known in the legal circle as 'deferred prosecution agreement', the same deal Wacovia accepted despite overwhelming evidence of intentional criminal conduct.
Adam Kaufman, chief of the investigative division of the Manhattan D.A. office defended the approach in the AP story, by saying, "prosecutors could have indicted low-level bank employees who handled the transactions on a daily basis. But that wouldn't get the executives making the decisions and figuring out exactly who that is can be daunting."
Kaufman continued, "An indictment can be a death sentence for a financial institution and ruining large banks can trigger unforseen economic ripple effects."
The DA summed up what many believe is true, that banks and corporations are "too-big-to fail and too-big-to jail."
U.S. Treasury Secretary Tim Geithner echoed Kaufman's sentiments. Geithner once described the financial system as a "target rich environment" for financial fraud. Geithner further explained how massive a problem it can be: "if banks and corporations were criminally indicted the results would inflict disaster for investors and stockholders."
To prevent financial institutions from facing criminal indictments for intentional violation of federal bank laws, the Feds often press the executives, in exchange for a civil fine, and be put on probation, to confess illegal activity that is particularly described in the media as an oversight to uphold federal policy rules.
Or the government can recommend a "deferred prosecution" or drop the matter altogether.
A deferred prosecution gurantee zero jail time. In 2003, U.S. Justice Department issued a memo commending deferred prosecution as a legal approach. "With cooperation by the corporation, the government may be able to reduce tangible losses, limit damage to their reputation and preserve assets for restitution."
The memo included cozy safeguards: "a deferred prosecution or non-prosecution agreement can help restore the integrity of a company's operation and preserve the financial viability of a corporation involved with criminal conduct."
We are currently living under government more interested in preserving the integrity of financial operations that it has investigated for fraud and money laundering. Even more appalling is the fact our government found the institutions guility of intentionally breaking the law. And still no real punishment.
British investigator Martin Woods felt a relief of vindication when he received the news that Wachovia confessed to all the illegal activity that he brought to their attention. But instead of being commended for a job well done when he uncovered the "dirty money" scheme the executives made him the villain.
In May 2009 he settled the "whistleblower" lawsuit for an undisclosed amount of compensation against Wachovia. Martin Woods is on the rebound and now runs a London-based company called " Hermes Solution," drawing on his expertise.