The agreements address Wachovia’s Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance program and primarily relate to customer accounts held by Mexican money exchange houses in Wachovia’s Global Financial Institutions and Trade Services (GFITS) division between 2004 and 2007.
Wachovia Bank has entered into a deferred prosecution agreement with the US Attorney’s Office for the Southern District of Florida and the US Department of Justice. Under the agreement, the bank acknowledges that its AML compliance programs were inadequate and agrees to forfeit $110m and implement certain remedial measures. In one year, if Wachovia has complied with the terms of the agreement, the Department of Justice will ask a US court to dismiss all charges against the bank. The agreement states that there is no evidence or allegation that Wells Fargo’s AML program is deficient.
Wachovia Bank has entered into a Consent Order with the Office of the Comptroller of the Currency (OCC), in which it has committed to take the necessary steps to address deficiencies and enhance its BSA and AML policies and procedures related to foreign correspondent banking activities. Wachovia has also agreed to pay the OCC a civil money penalty of $50m.
Wachovia Bank has also agreed to a Consent to the Assessment of Civil Money Penalty with the Financial Crimes Enforcement Network of the US Department of Treasury (FinCEN). The $110m penalty imposed by FinCEN will be satisfied by the $110m forfeiture made to the Department of Justice.
The focus of these investigations was primarily in the GFITS division of Wachovia Bank from 2004 to 2007, before Wells Fargo acquired Wachovia at the end of 2008. By early 2008, Wachovia Bank had exited all relationships with foreign money exchange houses.
Wachovia has enhanced its AML and BSA compliance program that have strengthened its ability to guard against unlawful use of its system by wrongdoers. Over the past three years, Wachovia, and since January 2009, Wachovia as part of Wells Fargo, has invested $42m evaluating and improving the BSA/AML compliance program.
Since its acquisition by Wells Fargo, Wachovia has also been subject to Wells Fargo’s BSA/AML compliance program and compliance and operational risk management, oversight and independent testing.
In addition to this matter, Wachovia Bank and the Department of Justice have resolved the remaining outstanding issues related to relationships Wachovia had from 2003 to 2008 with payment processors for telemarketing companies, including Payment Processing Center. Wachovia reached a settlement with the OCC on this issue in 2008 and has paid restitution to consumers who may have been subject to fraud by the telemarketers.
These settlements complete all pending bank-specific investigations of Wachovia’s correspondent banking business.
