Wachovia Targeted in Drug Money Laundering Probe

Feds look into bank's conection with suspect casas de cambio
By Rob Quinn,  Newser Staff
Posted Apr 26, 2008 7:20 AM CDT
Wachovia Targeted in Drug Money Laundering Probe
Wachovia CEO Ken Thompson talks to employees during a meeting at the bank's corporate headquarters in Charlotte, N.C., in this Thursday, Feb. 21, 2008 file photo.    (AP Photo/Chuck Burton)

Federal prosecutors have targeted Wachovia in an investigation into the use of money-exchange houses along the Mexican border to transfer money from US sales to Latin American drug lords, the Wall Street Journal reports. The bank invested heavily in the casas de cambio despite warnings that such firms were often used by drug cartels for money laundering.

Millions of dollars held in Wachovia accounts have been seized. Wachovia has cut its ties with the exchange firms and is in talks with the Justice Department about reforms and oversight of its compliance system, as part of a possible deal to avoid prosecution.

(More Wachovia stories.)

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