[THS] Wachovia And Major U.S. Banks Helping Mexican Drug Cartels

[The Harder Stuff in news and commentary]

http://www.businessinsider.com/how-wachovia-and-major-us-banks-have-spent-the-past-four-years-funding-mexican-drug-cartels-2010-6

How Wachovia And Major U.S. Banks Have Spent The Past Four Years Helping
Mexican Drug Cartels


Vince Veneziani | Jun. 29, 2010, 8:26 AM | 2,723 | comment 25

Since 2006, thousands of people have been killed in the ongoing
drug war between Mexican cartels and government forces.

A new must-read article in the August issue of Bloomberg Markets smashes open the
world of shadow banking between large banks in the United States and their role in
the funding of Mexican drug operations.

Back in March, Wachovia struck a deal with Federal prosecutors under which the
bank admitted it didn't do enough to prevent money-laundering between criminal
organizations, in which illicit funds transferred flew past the $300 billion mark. Now
Wachovia faces charges from the Department of Justice over violating the Bank
Secrecy Act - a first for the bulge bracket of large U.S. banks.

Similarly, traffickers used accounts at Bank of America to purchase three planes that
ended up smuggling 10 tons of cocaine. "Federal agents caught people who work for
Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago
and Brownsville, Texas, from 2002 to 2009," says the article.

HSBC and Banco Santander are also involved.

The situation has spun out of control, with people like investigator Martin Woods
quitting his job at Wachovia because no one would listen to his warnings. Mexican
Senator Felipe Gonzalez now carries a .38 pistol with him for protection but even he
acknowledges just how bad the violence has become.

"I know this [gun] won't stop the narcos when they come through that door with
machine guns, but at least I'll take one with me."

And while cross-border smuggling of cash and drugs won't be stopped effectively
anytime soon, one place authorities can hit is the bank. Specifically, Wachovia is first
in line for a slap on the wrist as the bank has repeatedly ignored warnings by
regulators and authorities:

"By 2004, many U.S. banks had closed their accounts with these companies, which
are known as casas de cambio. Wachovia ignored warnings by regulators and police,
according to the deferred-prosecution agreement. 'As early as 2004, Wachovia
understood the risk,' the bank admitted in court. 'Despite these warnings, Wachovia
remained in the business."

http://www.businessinsider.com/how-wachovia-and-major-us-banks-have-spent-the-
past-four-years-funding-mexican-drug-cartels-2010-6#ixzz0sQPFcziv