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Bank pays hefty fines to avoid prosecution

Posted on April 01, 2010 3:00 AM EST

One of the largest banks in the United States agreed to settle with the federal government by paying $160 million. The payment will resolve a criminal investigation being conducted by federal authorities into Wachovia Bank's failure to set up an anti-money laundering program required under the Bank Secrecy Act. Allegedly between 2003 and 2008, the bank failed to prevent two cocaine trafficking cartels from laundering money through Mexican exchange houses. Miami criminal defense law firmshave seen the number of money laundering prosecutions on the rise as the federal government continues to battle the drug trafficking cartels.
Wells Fargo/Wachovia in exchange for avoiding prosecution paid the hefty settlement and admitted that it failed to monitor $420 billion in money transfers to Latin American exchange houses. The bank acknowledged that its failure to abide by the Bank Secrecy Act allowed the drug cartels to conduct a money laundering scheme that exceeded $110 million. The money allowed the cartels to purchase airplanes to traffic cocaine and marijuana into the United States. Four of planes laden with 20,000 kilograms of cocaine were seized by federal law enforcement authorities. The trafficking problem of course leads to the large number of arrests for cocaine possession in South Florida.

The United States Attorney's Office for the Southern District of Florida agreed to defer prosecution against the bank until the large financial institution comes into compliance with the Bank Secrecy Act. Part of the reason the government is deferring prosecution is due to the fact that Wells Fargo took over Wachovia and there is no evidence that they themselves have failed to comply with federal law. Wachovia got themselves into trouble by allow the exchange houses unfettered discretion in transferring large sums of money that were the proceeds of drug trafficking operations into accounts in the United States. The transfers were made by wire and by armored cars delivering large amounts of cash to the bank.

The deferred prosecution agreement is similar to the pre-trial intervention program offered in state court for first time offenders. In state court, depending on the charges, many defendants are offered the program in exchange for a dismissal of the charges down the road. Typically, the program last approximately six months and if the defendant completes all of the conditions set forth by the prosecutor, the charges will be dropped. The benefit of the program is that defendants never enter a plea to the charges which prevents them from having a criminal record. The program is effective for defendants who are not citizens of the United States. Since entering and successfully completing the program results in a dismissal result, immigration consequences such as deportation or denials of residency or citizenship can be avoided.

Experienced and effective Miami criminal defense lawyers are aware that under the current state of the law, any plea taken by anyone other than a U.S. citizen can have devastating effects on individuals and families. Unsuspecting defendants who accept pleas to seemingly harmless charges with little or no consequences can later find themselves in immigration custody. However, if an unsuspecting defendant accepted a plea, a skilled post-conviction relief attorney can many times have the plea vacated and the charges dismissed. The success of this procedure depends on the jurisdiction where the plea was entered.

Wachovia to Pay $160 Million to End Money Laundering Probe, Business Week.com, March 18, 2010.