Report: Prosecutors Look at Wachovia in Money-Laundering Probe

[maddezmom]

Source: The Street

Wachovia(WB - Cramer's Take - Stockpickr) is being investigated by federal prosecutors as part of a larger probe of alleged laundering of drug money, according to a published media report.
The report, in Saturday's Wall Street Journal, cited people familiar with the matter.

It said Wachovia is talking to the Justice Department about reforming its compliance system and faces a possible deferred-prosecution deal that would give the government significant oversight of the bank. A Wachovia representative said the company is cooperating with the investigation, the report added.

The probe is related to the alleged laundering of drug revenue by Mexican and Colombian money-transfer companies, the report said. Wachovia is one of several large banks that officials have investigated because of relationships with such companies, according to the report. Wachovia and "some other" U.S. banks cut off their ties to Mexican foreign-exchange companies in December and January following inquiries in the government's investigation, the report added.



Read more: http://www.thestreet.com/s/report-prosecutors-look-at-wachovia-in-money-laundering-probe/newsanalysis/banking/10413985.html?puc=googlefi&cm_ven=GOOGLEFI&cm_cat=FREE&cm_ite=NA

[AlphaCentauri]

1. Wachovia caught in money-laundering probe

Source: UPI

CHARLOTTE, N.C., April 26 (UPI) -- U.S. investigators are looking into the role of Wachovia Corp. in an alleged money laundering scheme involving Mexican and Colombian drug money, officials said.

The Wall Street Journal reported Saturday the Charlotte, N.C., bank is just one of several U.S. banks under investigation.

The newspaper said Wachovia and the other banks severed ties with the Mexican foreign-exchange firms in December and January after inquiries began.

"Wachovia is committed to maintaining a strong anti-money-laundering program," said Wachovia spokeswoman Christy Phillips-Brown


Read more: http://www.upi.com/NewsTrack/Top_News/2008/04/26/wachovia_caught_in_money-laundering_probe/6526/

[thunder rising]

2. Yeah, yeah, but they can't reeeaaallly go after the banks right now can they?

WTF, they found another way of keeping their ass afloat without tapping the Fed. Go for it!

[TheWatcher]

3. Caught but will never be held accountable for a damn thing.

Due to the fact we no longer have a functioning system that follows the rule of law.

The United Banana Republic.

[ruby slippers]

4. actually, this is old news...I heard about it about three months ago when

Jim Cramer screamed something about "Watch Wachovia" and mentioned this.....

You are right. Someone will just buy them out or something.....and it will all go away....

[mcollier]

5. Tip of the Iceburg

For the love of money....

[Liberty Belle]

6. Were they laundering for the RNC, too? Remember these stories:

The RNC treasurer who was faking audits while money disappeared was linked to Wachovia. Note: if anyone knows whether Grover Norquist had ties to either Christopher Ward, his company, or Wachovia, please send me a private message.


NRCC Treasurer Under Scrutiny Was Thought of as 'Gold Standard'

By Paul Kane
Washington Post Staff Writer
Thursday, March 13, 2008; A01



In the tiny world of people who keep the books for Washington's multitude of political committees, Christopher J. Ward was considered the Republican "gold standard," in the words of a former co-worker -- one of the few people with so much expertise in election law that everyone wanted Ward's services.

The quiet workaholic is listed as treasurer for 83 GOP fundraising committees over the past eight years, according to Federal Election Commission records. In the past five years alone, he oversaw the accounting for committees that raised more than $400 million, $368 million of it at the National Republican Congressional Committee, according to a Washington Post review of those records.

But in late January, Ward, 39, was dismissed as the NRCC announced that it had found financial "irregularities" that "may include fraud." The FBI is investigating what appears to be "a significant amount of money" missing from the House Republican fundraising arm, according to a law enforcement official.
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/12/AR2008031204051_pf.html

Also, in this same time period, Ward started or moved the bank accounts for these funds to Wachovia Bank. The article notes that it was a loan from Wachovia that first alerted the NRCC to the forged audit.
NRCC officials contacted the FBI soon after discovering that the former employee, Christopher J. Ward, had submitted what they believe to be a fake internal audit to Wachovia as part of a loan application by the committee.
But here's the interesting thing about those accounts at Wachovia. In spite of the fact that Ward served as treasurer for a bunch of PACs and other funds using Wachovia, he didn't have those accounts all at one branch. He had them spread out at branches around DC and (in at least one case) in North Carolina. I suspect such an arrangement would make it easy to move between accounts while still hiding some of that movement. Add in the fact that all the NRCC's accounts got merged into one, and it sure seems like the set-up would make it relatively easy to launder money through these various accounts--presumably to benefit the people who were managing the books, but almost certainly also to launder soft money into hard, so it could be used directly on campaign expenses.
Mind you, this is all a big guess. But to this non-expert, it does look like the changes made it easier to move money between the various kinds of accounts at RNCC and in PACs to make it available for campaigns.
http://emptywheel.firedoglake.com/2008/02/27/enron-accounting/

[NeoConsSuck]

7. When can we expect the Wachovia CEO to resign?

It was the banks who reported the money transfers of Eliot Spitzer, and the fbi were more than willing to take down an elected official.

Obviously, this Wachovia scandal is a bigger crime than hiring a prostitute.

[jmowreader]

8. Oh great. MY money is in that bank!

[flashl]

9. You might want to check this out ...

Wachovia to Pay as Much as $144 Million in Marketing Case

The Wachovia Corporation, the banking giant, has agreed to pay as much as $144 million to end an investigation accusing the bank of allowing telemarketers to use its accounts to steal millions of dollars from unsuspecting victims.

The settlement is the second-largest penalty ever demanded by the federal Office of the Comptroller of the Currency and concludes an 18-month investigation into Wachovia’s relationships with marketing firms that stole millions of dollars from thousands of victims, many of them elderly.