Dirty money thrives despite Mexico drug war
June 22nd 2012 · 2 Comments
In 2010, Wachovia, now owned by Wells Fargo, settled out of court for the largest violation of the Bank Secrecy Act in US history. They paid a fine of $160m for laundering a whopping $378.4bn from Mexican currency exchange houses between 2004 and 2007. Much of this cash is thought to have been drug money, moved without proper documentation from Casa’s de Cambio in Mexico to US banks…
Mexico’s President Felipe Calderon has said: “The prevention of money laundering and combating financial terrorism is a fundamental part of the state’s comprehensive strategy against organised crime.” But the statistics are worrying. In the last 10 years, Mexico has seized less than $40m in cash transfers – that’s about $4m annually out of close to $40bn in drug sales.
Currency exchange houses, like the ones used by Wachovia, are probably the most common way for cartels to launder funds, former Arizona Attorney General Terry Goddard told a gathering at Woodrow Wilson Centre for Studies in May 2012, although it’s impossible to be sure. Traffickers normally “contract with money brokers to use their networks of bank accounts and business connections to structure large sums for transport across the border”, Goddard said.
A version of this column originally appeared in mexicoinstitute.wordpress.com.
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