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Wachovia Will Pay Record $160 Million to Settle Casas de Cambio Case
By Brian Monroe
printUPDATE: Adds information throughout on the details of the deferred prosecution agreement. Wells Fargo & Co., the parent company of Wachovia Bank, will pay $160 million to settle problems tied to accounts with Mexican currency exchange companies, the highest monetary penalty to date for anti-money laundering issues. The record fine, paid to the U.S. Justice Department and the Office of the Comptroller of the Currency (OCC), stems from the bank's past accounts with casas de cambio used by drug traffickers to launder money. The bank failed to sufficiently scrutinize more than $420 billion in transactions from the Mexican companies despite...
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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.
For the second time this year, a U.S. judge has granted federal investigators broad authority to review a global bank's anti-money laundering records as part of an offshore tax evasion probe.
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.
As many as a half dozen banks have severed relationships with foreign money services businesses for failing to register with the U.S. Treasury Department under rules that took effect earlier this year, say compliance professionals.
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 nation's financial intelligence unit expects the number of bank suspicious activity reports on remote deposit capture services to rise in the coming years, according to a bureau report.
A 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.
Federal regulators have increased their scrutiny of correspondent relationships that could be used to mask nested accounts for non-U.S. money remitters otherwise barred from American banks because of compliance risks.
A Utah bank must pay $8 million for failing to report billions of dollars in suspicious remote deposits by high-risk, Mexican currency exchange clients, the U.S. Treasury Department said Friday.
Internal clashes at Wachovia Bank over whether a corporate client or its customers were likely laundering money preceded the tip-off that contributed to the United States' decision to levy the largest-ever anti-money laundering fine, according to a former bank compliance officer.
Dozens of U.S. banks along the country's southern border are denying new accounts to wealthy Mexican nationals and corporations because of due diligence troubles caused by drug-related violence in Mexico.
A provision in the Senate's proposed financial overhaul bill could incentivize more anti-money laundering compliance officers to blow the whistle on any illegal activities of their employers in exchange for large payouts.
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.
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.
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.
Bank of America acknowledged Wednesday that its lax policies allowed South American money transmitters to funnel $3 billion through a Manhattan branch and agreed to pay $7.5 million in a settlement with the Manhattan District Attorney's Office.