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U.S. Ends Record Deferred Prosecution Agreement with Wachovia Bank
By Brian Monroe
printA U.S. District Court judge Wednesday signed an order ending Wachovia Bank's deferred prosecution agreement with the U.S. Justice Department for failing to identify transactions potentially tied to drug cartels. The two-page order of dismissal, submitted by the U.S. Attorney for the Southern District of Florida Wilfredo Ferrer, was approved by Judge Joan Lenard on the grounds that Wachovia, now part of Wells Fargo & Co., had "fully complied with all of its obligations and not otherwise breached" the terms of its March 2010 agreement. The dismissal formally ends the bank's agreement that came as part of a record $160...
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U.S. officials Tuesday imposed an $8.2 million monetary penalty on a defunct New Jersey bank that opened accounts with Mexican and Dominican currency exchangers in violation of anti-money laundering rules.
Without the threat of larger monetary settlements or prosecutions, financial institutions have little economic incentive to seriously enforce their anti-money laundering compliance controls, according to Peter Reuter, a professor in the Department of Criminology at the University of Maryland.
A growing number of compliance professionals expect that someone at a bank, even a compliance officer, will be prosecuted for violating the Bank Secrecy Act in the not-too-distant future.
In the wake of regulatory crackdowns and multiple criminal probes, financial institutions operating in Mexico are spending millions of dollars to upgrade their anti-money laundering programs, say bank staff.
The U.S. Treasury Department is reportedly investigating the role of Wachovia Bank compliance staff in the financial institution's failure to sufficiently scrutinize more than $420 billion in transactions tied to Mexican currency exchange businesses.
If March's record penalty against Wells Fargo & Co. has reminded compliance departments of the bite of anti-money laundering regulatory fines, it has also been a reminder of something else. With acquisitions come problems.
Federal bank examiners failed for at least four years to identify widespread signs of money laundering at Wachovia Bank, frustrating officials who helped levy a $160 million penalty against the institution last week.
Two U.S. companies paid a total of $200 million dollars this week for anti-money laundering (AML) and sanctions violations. On Wednesday, Wells Fargo Co. agreed to pay the United States $160 million and the next day a Delaware corporation paid $40 million.
Wells Fargo & Co., the parent company of Wachovia Bank, will pay $160 million to settle anti-money laundering compliance problems tied to accounts with Mexican currency exchange companies, the company said Wednesday.
An expected settlement between the U.S. Justice Department and Wachovia Bank over lax anti-money laundering policies is highlighting the compliance risks of doing business with Mexican currency exchange companies.
A New York grand jury Wednesday indicted alleged Russian arms trafficker Viktor Bout for using shell companies and New York banks to buy planes in violation of U.S. sanctions.
Banks that merge or consolidate risk regulatory reprimands if they choose to scale back their anti-money laundering protections in the process, say consultants.
Wachovia Bank will pay up to $125 million to compensate victims of a telemarketing fraud conducted through accounts at the bank and a $10 million civil penalty under agreements reached with the Office of the Comptroller of the Currency.
Wachovia Bank, which U.S. authorities have connected to a Mexican exchange house allegedly involved in a money laundering operation, is terminating its correspondent relationships with all money services businesses based outside the United States.
Wachovia in Philadelphia rejected a payment destined for a "Specially Designated Global Terrorist," on or about October 29, 2004, instead of blocking the payment, according to OFAC.
The U.S. Justice Department is seeking the forfeiture of $110 million in proceeds from an allegedly corrupt Italian bankruptcy case.
In a June 5 letter to the U.S. Drug Enforcement Administration, Miami attorney Frank Rubino, who represents Casa de Cambio Puebla, said federal agents on May 16 seized the companys funds deposited at a Miami branch of Wachovia Bank.
In a 5-3 decision, the court said nationally chartered banks, which are regulated by the Office of the Comptroller of the Currency (OCC), and their subsidiaries are not subject to further regulation by the states.
The sanctions put pressure on U.S. banks to conduct greater due diligence on correspondent accounts to determine if they are linked to the Middle Eastern nation. That will likely continue a trend of foreign institutions dropping business dealings with the country.