Federal authorities in Miami have filed criminal charges against Wachovia Bank, alleging it failed to block Mexican currency exchange houses from laundering more than $100 million in drug proceeds through the bank, people familiar with the case said Wednesday.
Wachovia Bank, a subsidiary of Wells Fargo & Co., would be able to avoid criminal prosecution under a proposed agreement with the Justice Department if it pays a $50 million fine and implements stronger anti-money laundering systems, sources said.
Prosecutors with the U.S. attorney's office, along with officials from the Drug Enforcement Administration, plan to hold a press conference Wednesday afternoon on the allegations.
Wachovia, charged with violating the U.S. Bank Secrecy Act, got out of the foreign money-transfer business two years ago.
In a statement published Monday in the Wall Street Journal, Wells Fargo said: "We look forward to resolving this issue, and are committed to maintaining compliant and effective anti-money laundering policies and practices, and a strong compliance and risk management culture across the integrated organization."
The currency exchange houses in Mexico and other Latin American countries allow U.S. immigrants and international businesses to send money back and forth. But for decades, federal authorities have targeted the casas de cambio as conduits for laundering cocaine and other drug profits for the Mexican and Colombian cartels.