Wachovia enters into deferred prosecution agreement

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date Thu, Mar 18, 2010 at 5:51 AM
subject Wachovia Enters Into Deferred Prosecution Agreement Bank Agrees to Pay $160 Million

Wachovia Enters Into Deferred Prosecution Agreement
Bank Agrees to Pay $160 Million

MAR 17 - Wachovia Bank, N.A. (“Wachovia”), one of the largest banks in the United States, has entered into a deferred prosecution agreement with the U.S. Attorney’s Office in the Southern District of Florida and the Asset Forfeiture and Money Laundering Section of the Criminal Division of the Department of Justice to resolve charges that it willfully failed to establish an anti-money laundering program. Today’s agreement is the result of an investigation into Wachovia’s transactions with Mexican currency exchange houses, commonly known as “casas de cambio” (“CDCs”), announced Jeffrey H. Sloman, United States Attorney for the Southern District of Florida, Lanny A. Breuer, Assistant Attorney General for the Criminal Division of the Department of Justice, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, Daniel W. Auer, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (“IRS-CID”), John C. Dugan, Comptroller of the Currency, Office of the Comptroller of the Currency (OCC), and James H. Freis, Jr., Director, Financial Crimes Enforcement Network (FinCEN). The agreement also resolves Wachovia’s admitted failure to identify, detect, and report suspicious transactions in third‑party payment processor accounts.

A criminal information, filed March 12, 2010 and unsealed today, charges Wachovia with willfully failing to maintain an anti-money laundering program from May 2003 through June 2008, in violation of the Bank Secrecy Act (“BSA”). According to the information and other documents filed with the court today, including a detailed Factual Statement and a Deferred Prosecution Agreement (“the Agreement”), Wachovia failed to monitor for potential money laundering activity more than $420 billion in financial transactions with the CDCs.

As part of the Agreement filed today, Wachovia has agreed to forfeit $110 million to the United States, which represents proceeds of illegal narcotics sales that were laundered through Wachovia. FinCEN also assessed a $110 million Civil Money Penalty that is deemed satisfied by the forfeiture to the U.S. government, for serious and systemic BSA violations. Moreover, pursuant to the terms of the Agreement and the OCC’s separate Cease and Desist and Civil Money Penalty Orders, Wachovia has agreed to pay an additional $50 million fine to the U.S. Treasury. The total sum of $160 million is due within five days from the date of the Agreement.

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