Cocaine smugglers laundered billions through Wachovia bank
Somehow, the major banks in the United States have gone from serving as the main bulwarks of credit and entrepreneurial pluck to the moral equivalent of a James Bond villain. There were, for instance, the jaw-dropping mortgage frauds detailed by "60 Minutes" just last night. There was last week's report on a group of Citibank-affiliated debt collectors actually killing a customer in Indonesia in a dispute over a credit card bill. And there's the long-running but demoralizing story of the unjustified efforts of large banks to foreclose on active-duty soldiers.
Now comes this: Wachovia Bank -- which merged with the West Coast banking giant Wells Fargo in 2009, in one of the many industry moves sparked by the 2008 mortgage meltdown -- seemingly looked the other way while some of the world's biggest drug lords funneled billions through the bank's holdings. As one federal prosecutor put it, the arrangement "gave international cocaine cartels a virtual carte blanche to finance their operations."
The Guardian reported on Sunday that an extensive investigation by the IRS, DEA and FBI uncovered the porous money-laundering system. The feds found that cocaine smugglers successfully moved tens of billions of dollars in funds through Wachovia accounts using wire transfers, traveler's checks and cash shipments. The paper notes that the flow of cash through the bank began in 2004 -- coinciding with the rise of Mexico's menacing drug gangs and the increased violence on the U.S.-Mexico border. The bank was quietly punished for its actions.
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