March 18, 2010 in Business

Wachovia to settle probe of drug profit laundering

Associated Press
 

MIAMI – Banking giant Wachovia Corp. will pay $160 million to settle a federal investigation into laundering of illegal drug profits through Mexican exchange houses in the largest case of its kind ever brought against a U.S. bank, prosecutors said Wednesday.

“This is historic,” acting U.S. Attorney Jeffrey Sloman said. “There is no other case like this one anywhere.”

The probe, which began in 2005 when a Drug Enforcement Administration narcotics dog in Florida detected cocaine traces in an airplane, ultimately uncovered at least $110 million in drug profits laundered from Mexico through Wachovia. The total settlement includes forfeiture in that amount plus a $50 million fine.

The agreement means Wachovia and its executives will avoid criminal prosecution in return for the $160 million payment and significant improvements in its anti-money laundering program.

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