Monday, April 4, 2011

Wachovia Let Off the Hook for Laundering Drug Funds Equal to 1/3 the Mexican Economy

For the past two years, I've been able to buttonhole my Congressman at the County Democratic Party Convention. I've told him that big Wall Street firms like Goldman Sachs and JP Morgan Chase must be destroyed. Annihilated. He thought I was nuts, and ended the conversation as quickly as possible. Local Dem officials thought I was nuts also, but they were more willing to listen. And now, I think they are coming around to my point of view. They're initiating the conversations, not me. And they're asking good questions, such as "What can be used to go after a bog Wall Street firm and shut it down?"

My reply is that criminal activity is rampant throughout the financial and banking system: snorting cocaine on trading floors: falsifying expense accounts to enable tax fraud and pay for sexual services; failure to follow legal procedures for conveying real estate deeds and trusts; outright falsification and forging of documents in the mortgage foreclosure crisis; the fraud the rating agencies committed in assigning safe ratings to securities based on sub-prime mortgages; the failure to completely explain the risks involved in financial derivatives sold to clients, then turning around and using more financial derivatives to bet against those clients.

And, laundering drug money. Here's a story from Naked Capitalism that has yet to be picked up in the U.S. mainstream news media.

Wachovia Paid Trivial Fine for Nearly $400 Billion of Drug Related Money Laundering
If this news story does not prove that banks are effectively above the law, I don’t know what does. The Guardian, in an account yet to be picked up anywhere in the US media (per Google News as of this posting, hat tip readers May S and Swedish Lex) reports that Wachovia was at the heart of one of the world’s biggest money laundering operations, moving $378.4 billion into dollar-based accounts from Mexican casas de cambio, which are currency exchange firms. While these transfers took place over a period of years, the article notes that it equals 1/3 of Mexican GDP. And the resolution?
Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year’s “deferred prosecution” has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.
Read more.

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