Wachovia reaches $160 mn settlement with US authorities

Wachovia Bank NA will pay $160 million to the US authorities to settle allegations related to its anti-money laundering compliance programme.

Wachovia, which is part of financial services major Wells Fargo & Company, has reached agreements with the US Department of Justice and banking regulators.

"The agreements address Wachovia's Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance programme 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 said in a statement yesterday. It would shell out $160 million to settle the matter.

 

According to the statement, investigations by the US authorities focused on GFITS division. "By early 2008, Wachovia Bank had exited all relationships with foreign money exchange houses," it added.

"In one year, if Wachovia complies 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 programme is deficient," the statement said.

The firm was acquired by Wells Fargo in late 2008 during the financial meltdown.

Wachovia noted that Wells Fargo about these matters before the acquisition and "established reserves in prior periods that will fully cover the settlement amounts".

In addition, Wachovia and the Department of Justice have resolved the remaining outstanding issues related to relationships the bank had from 2003 to 2008 with payment processors for telemarketing companies.