Case Law Database

Money laundering


• Conversion/transfer of proceeds of crime


• Anti-money laundering
• Proceeds of crime
• Due diligence
• National risk assessment

United States of America v. Wachovia Bank

Fact Summary

The United States Congress enacted the Bank Secrecy Act (BSA) in order “to address an increase in criminal money laundering activities utilizing financial institutions.” As part of the BSA, domestic banks, insured banks and other financial institutions are required “to maintain programs designed to detect and report suspicious activity that might be indicative of money laundering, terrorist financing, and other financial crimes, and to maintain certain records and file reports related thereto that are especially useful in criminal, tax, or regulatory investigations or proceedings.” Wachovia Bank, a federally charted bank, was required to abide by these regulations.

In June 2005, the U.S. Attorney’s Office for the Southern District of Florida, the Drug Enforcement Administration (DEA) and the Internal Revenue Service (IRS) began an investigation into specific wire transfers sent from Mexico to the United States. These funds were used to buy aircraft in the U.S., which in turn were being used “to move illegal narcotics from narcotics-producing countries for ultimate distribution in the United States.” Ultimately, “the wire transfers were traced back to correspondent bank accounts held by certain Mexican currency exchange houses (commonly referred to as ‘casas de cambio’ or ‘CDCs’) at Wachovia in the United States.” The bank accounts corresponding to these CDCs were managed and supervised by Wachovia’s business unit in Miami, Florida.  Between 2004 and 2007, almost $13 million USD “went through correspondent bank accounts at Wachovia for the purchase of aircraft to be used in illegal narcotics trade.” In fact, more than twenty thousand kilograms of cocaine were seized from these aircraft.

The investigating agencies determined that Wachovia’s CDC business was high risk. Indeed, Miami was designated as a High Intensity Money Laundering and Related Financial Crime Area and a High Intensity Drug Trafficking Area. Furthermore, in 2005, Mexico was designated a “high-risk source of money laundering activity, particularly the financial activities through CDCs.” The DEA warned the financial sector in 2006 of the use of CDCs by Mexican drug trafficking organizations to launder the proceeds of crime. FinCEN (Financial Crimes Enforcement Network of the U.S. Department of the Treasury) also warned of these dangers. Despite these warnings, Wachovia continued to do business with Mexican CDCs. During the course of their investigation, the investigating agencies “found readily identifiable evidence and red flags of large-scale drug money laundering”, including structured wire transactions, sequentially numbered traveler’s cheques containing unusual markings and significant bulk transactions in great excess of a customer’s self-identified expectations.

In May 2007, the U.S. Attorney’s Office for the Southern District of Florida, the DEA, the IRS and FinCEN began an investigation into Wachovia’s Bank Secrecy Act compliance program. The investigation “identified at least $110 million USD in drug proceeds that were funnelled through the CDC accounts held at Wachovia”, as well as significant failures in Wachovia’s compliance program.

According to court documents, “since the beginning of the BSA investigation, Wachovia [had] fully cooperated and [had] provided valuable assistance to law enforcement…Wachovia [had] devoted substantial resources to that investigation and to responding to the United States’ requests for information,” producing more than 8 million pages of documents.

In 2010, Wachovia reached a deferred prosecution agreement with the American government.

Commentary and Significant Features

The deferred prosecution agreement involving the $160 million USD payment by Wachovia was considered, at the time (2010), the "largest penalty ever imposed for a violation of the U.S. Bank Secrecy Act."

Sentence Date:

Cross-Cutting Issues


... as involves

• legal persons


Involved Countries

United States of America


Investigation Procedure

Involved Agencies

• United States Attorney's Office for the Southern District of Florida
• Drug Enforcement Administration (DEA)
• Internal Revenue Service (IRS)

Procedural Information

Legal System:
Common Law
Latest Court Ruling:
Court of 1st Instance
Type of Proceeding:
Proceeding #1:
  • Stage:
  • Official Case Reference:
    Case No. 10-20165-CR-LENARD
  • Court

    Court Title

    United States District Court for the Southern District of Florida.

    • Criminal


    According to the deferred prosecution agreement made on 16 March 2010, “Wachovia [waived] indictment and [agreed] to the filing of a one (1) count information in the United States District Court for the Southern District of Florida charging it with failing to maintain an effective anti-money laundering program, in violation of Title 31, United States Code, Sections 5318(h)(1) and 5322(a).” Wachovia also agreed to forfeit $110 million USD and pay a fine of $50 million USD.






    50000000 USD
  • Amount ordinary in USD:
    More than 500,000
  • Other Sanctions

    Forfeiture of $110 million USD to the government (representing the drug proceeds laundered through Wachovia via CDCs).



    United States District Court for the Southern District of Florida