US justice authorities are investigating Wachovia Corp, one of the top five US banks, as part of a probe into Latin American drug-money laundering, the Wall Street Journal reported on Saturday.
Wachovia is one a several large US banks being examined for relations with Mexican and Colombian money-transfer and foreign exchange firms directly involved in the laundering, the Journal said.
The Journal also said the bank is possibly facing an agreement for deferred prosecution with the US Department of Justice that would subject it to “extensive federal oversight.”
But Wachovia denied that assertion.
“The statement in the article that Wachovia is discussing a deferred prosecution agreement with the Justice Department is not true,” spokeswoman Christy Phillips-Brown said.
“Wachovia is not currently and has not in the past been engaged in any such discussions,” she said.
Phillips-Brown refused to confirm or deny any investigation, saying the bank “does not comment on the status or existence of government investigations and did not comment for the Journal article as implied in the story.”
But “Wachovia is committed to maintaining a strong anti-money laundering program,” she said.
The Department of Justice is investigating drug-money laundering through the hundreds of money-transfer businesses — known in Spanish as casas de cambio — around the country that handle remittances to Latin American countries by workers in the US.
The remittance business processes about US$50 billion a year, the Journal said.
“Internal emails and documents filed in federal courts in Miami, Chicago and New York describe former ties between Wachovia and money-changing firms,” the Journal said.
It said Miami court documents show that US agents have seized more than US$11 million in 23 Wachovia accounts that belonged to the Mexican chain Casa de Cambio Puebla. US authorities suspected the money was the laundered funds of a drugs syndicate.
The probe into Wachovia is part of a larger investigation into money laundering by drug cartels through the money transfer firms.
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