When Wachovia Bank agreed to a settlement with the U.S. government on charges that it failed to prevent drug traffickers from laundering more than $100 million through accounts at the bank, it became the financial institution with the unfortunate distinction of having paid the largest penalty, $160 million, for a violation of the Bank Secrecy Act. Under terms of the deferred prosecution agreement, Wachovia forfeited $110 million and paid a $50 million fine to the Treasury.

The U.S. Attorney for the Southern District of Florida called Wachovia’s failure to properly monitor and report on suspicious activity “systematic,” a problem that allowed more than $400 billion in unmonitored funds to be channeled through accounts at the bank between 2004 and 2007 by currency exchange houses in Mexico, primarily by way of wire transfers.

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Peter Westerman


Credit Union Times

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