In 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. During the course of the investigation, it was discovered that Mexican cartels were first smuggling US dollars, gained from selling illegal drugs in America, across the Mexican border and then laundering them through Wachovia Bank Branch in Miami, Florida.

Once in Mexico, the money was given to Mexican based currency exchange houses (commonly referred to as "casas de cambio") who deposited it into their Mexican bank accounts. These funds were then wired to Wachovia Bank's accounts in Florida and the origin, again, was not properly checked by Wachovia. Any remaining bank notes were shipped back to the United States using Wachovia's "bulk cash service." By using these two methods provided by Wachovia, the drug cartels were able to integrate their illegal funds into the financial system.

Read the attached Case Facts US v Wachovia.pdfdownload and Deferred Prosecution Agreement US v Wachovia 2010-1.pdfdownload

• How was the Wachovia Bank involved in money-laundering? What specific charges were made?
• Were the charges for failure to maintain a system to detect money launderers, under theBank Secrecy Act (BSA), criminal or civil?