WASHINGTON (AFP) — US justice authorities are investigating Wachovia Corp, one of the top five US banks, as part of a probe into Latin American drug money laundering, the Wall Street Journal reported Saturday.
Wachovia is one a several large US banks being examined for relations with Mexican and Colombian money-transfer and foreign exchange firms directly involved in the laundering, the Journal said.
The Journal also said the bank is possibly facing a deferred-prosecution agreement with the US Department of Justice that would subject it to "extensive federal oversight."
But Wachovia denied that assertion.
"The statement in the article that Wachovia is discussing a deferred prosecution agreement with the Justice Department is not true," spokeswoman Christy Phillips-Brown told AFP.
"Wachovia is not currently and has not in the past been engaged in any such discussions," she said.
Phillips-Brown refused to confirm or deny any investigation, saying the bank "does not comment on the status or existence of government investigations and did not comment for the Journal article as implied in the story."
But "Wachovia is committed to maintaining a strong anti-money laundering program," she added.
The Department of Justice is investigating drug-money laundering through the hundreds of money-transfer businesses -- known in Spanish as casas de cambio -- around the country that mostly handle remittances to Latin American countries by workers inside the United States.
The remittance business processes about 50 billion dollars a year, the Journal said.
"Internal emails and documents filed in federal courts in Miami, Chicago and New York describe former ties between Wachovia and money-changing firms," the Journal said.
It said Miami court documents show that US agents have seized over 11 million dollars in 23 Wachovia accounts that belonged to the Mexican chain Casa de Cambio Puebla. US authorities suspected the money was the laundered funds of a drugs syndicate.
The probe into Wachovia is part of a larger investigation into money laundering by drug cartels through the money transfer firms that involves both US and Mexican authorities.
The Journal said both Union Bank of California and American Express Bank International have paid authorities multi-million-dollar penalties as part of laundering investigations and charges that they fail to implement effective anti-money-laundering programs.
Phillips-Brown said that late last year Wachovia decided to exit its business with the casas de cambio, which she termed "a corporate decision."
The news about Wachovia came one day after it agreed to pay 144 million dollars in fines and claims after an investigation into telemarketing fraud that involved the use of Wachovia accounts.
The Justice Department was not immediately available for comment
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