International banks aid Mexican drug gangs
Money launderers for ruthless Mexican drug gangs have long had a formidable ally: international banks.
Last year, banking powerhouse Wachovia Corp. agreed to pay $160 million in forfeitures and fines after U.S. federal prosecutors accused it of “willfully” overlooking the suspicious character of more than $420 billion in transactions between the bank and Mexican currency-exchange houses — much of it probably drug money, investigators say.
Wachovia was moving money on behalf of the exchange houses through wire transfers, traveler’s checks, even large hauls of bulk cash, investigators said. Some of the money was eventually traced to the purchase of small airplanes used to smuggle cocaine from South America to Mexico, they said.
Wachovia paid the $160 million in what is called a deferred-prosecution agreement; no one went to prison, and the fines represented a tiny fraction of the money the bank had filtered.
In a similar case, another banking giant, HSBC Bank, is being monitored by U.S. regulators after a probe last year focused on bulk cash that the bank’s U.S. branch received from Mexican exchange houses, money suspected to be drug proceeds.
Complicity by banks has a deep history that still resonates in Mexico. Raul Salinas de Gortari, brother of former President Carlos Salinas de Gortari, used a maze of accounts in New York-based Citibank and other U.S. banks to secretly transfer millions of dollars to Switzerland in the 1980s and ’90s. No criminal charges of money-laundering or illicit enrichment were filed against Salinas. He is a free and wealthy man today.