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Getting dirty money clean

“The money becomes clean – it goes back to Mexico or it goes to other destinations to facilitate further drug dealing,” he added. “It buys more drugs; it pays for infrastructure, transport, wages; it buys weapons, and those are the same weapons that kill people.”

Woods took his suspicions to the British authorities, filing a series of suspicious activity reports, according to his lawsuit. He charged that, after alerting British authorities to various suspicious transactions in Mexico and other foreign countries, he was reprimanded, isolated and bullied inside the bank.

In his lawsuit, he claimed that, in the same month that he asked questions about the suspicious stream of travelers checks coming into London from casas de cambio, they suddenly stopped coming. But when Woods asked why, the suit charges, Wachovia’s Miami manager of Latin American banking challenged Woods “as to why he had problems when traveler’s checks were sent to London and problems when they were not.”

Last year a Wachovia spokesperson told Barron’s that Woods hadn’t been treated unfairly – that “Wachovia believes it has acted appropriately in its business dealings” and that “Mr. Woods’ claims to the contrary are without merit.”

Wachovia, now owned by Wells Fargo, declined Need to Know’s request for an interview and had no comment on Martin Woods. It directed us to Wells Fargo’s statement on the government agreement, which noted the criminal violation occurred well before “Wells Fargo acquired Wachovia.”

“It’s a systemic problem that exists in banking and has existed for decades,” said Robert Mazur.

Twenty years ago, working as an undercover federal agent, Mazur helped bring down the Bank of Credit and Commerce International (BCCI) in one of the most notorious money laundering investigations in history. He wrote about it in a book released last year, “The Infiltrator,” which recounts his experiences undercover in the Medellín cartel’s money laundering system

For two years, he secretly recorded the drug kingpins and bankers he did business with as they actively solicited illegal money.

“I got to see what really happened,” said Mazur. “I got to see what bankers were really doing and saying at a time when they were all smiles outwardly to the regulators who were in the bank.”

After they were convicted, Mazur had a chance to talk with the bankers again.

“What they said was, ‘Why are you picking on us? We haven’t been doing anything that isn’t being done by all the international banks around the world,’” he said.

Now retired from government, Mazur works as a private consultant, which brings him in regular contact with bank compliance officers.

“I’ve talked personally to many people who have been in compliance departments who tell me that, ‘Listen, the marching orders that I’ve gotten are, do the minimum you have to do in order to be in compliance with the regulations. No more,’” Mazur said.

“Some bankers in my experience – and I’ve been at three different banks – all they look for is the excuse as to why they can do it,” said Woods. “The best news banks get about the commercial transaction is good news. Good news means, ‘I can go make money’… So they often look at these transactions through opaque glasses to find the good news and wish to dismiss the bad news.”

How much dirty money is in circulation?

According to a UN report, there is $400 billion in drug money alone. Mazur says that, the way the system is set up, the potential profits for banks far outweigh the risks, as the Wachovia fine demonstrates.

“If you let me take in $420 and some billion in deposit and fine me $160 million I’d say that’s a pretty good business decision and if everybody thought that they weren’t going to be prosecuted and they could do that, I’m sure the line would be around the block,” said Mazur.

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  • Chris Kerr

    Robert Mazur’s “The Infiltrator” is a must-read. It is a compelling, well-written first-hand account of his amazing undercover work in one of the biggest money laundering investigations in history.

  • JanisL

    Florida is drowning in rampant banking corruption. The high number of foreclosures is clear evidence of mortgage fraud gone wild during the Bush years, 2000-2008 and beyond. The “asleep at the wheel” culture in Tallahassee, dictated by Bush’s brother Jeb. The edict went out here in 1998: no regulation of business, banking, the Chamber of Commerce’s dream! No consumer protection–you make a complaint to Tally, they ignore it! This culture still exists as Charlie Crist just left the worst of it in place! If you are cheated by a developer, a business, a scammer–you are on your own, there is no recourse in Florida. Mr. Mazur, take a look at the money laundering here, the FDOT laundering illegal foreign campaign contributions for the GOP/Bush, the murder of Raymond Lemme, a Florida investigator who tripped over this high crime prior to the prez election, and paid for it with his life! There is nothing the ruthless GOP powers that be will stop at to get their man in office! The pay to play has rendered state representation of ordinary Floridians nonexistent. It’s all about the high-roller special interests–developers, builders, corrupt, corrupt, corrupt!

  • D. Tigert

    Thanks to all involved in getting this out for the public to see and be enlightened. This other facet of Banking, money laundering, certainly adds much evidence to the corruption that is allowed by the very ones that are entrusted and paid to stop the very thing that they encourage.
    Can faces and names be attached to the OCC? How do they get their jobs and who has been responsible for putting them there? Can Congress see these banks in the same light that I see them; as more conscienceless, greedy, money snatching CEO machines? Evidently not. I guess that looking from the top has acompletely different perspective. Who could we goad into taking some action?

  • Steve Cook

    After reading Bob Mazur’s chilling report of banker’s laundering drug monies for large cartels and others, it becomes quiet clear what a dangerous position Mazur was in during his undercover work for the U.S. government. It also demonstrates how only a very few agents have the abilities to with stand the extreme pressures of working under for long months, knowing every move is being watched, and the criminals have the ability to kill and will, at any time in order to protect their millions and positions. I’m sure Mazur worked on other undercover cases that led up to his BCCI case that stunned the world, and still underscores just how far some dirth bankers will go to make a dollar.

  • Bill Andrews

    What is the Drug dealers going to do when the Government starts micro- chipping money to track over the borders to drug dealers…( Encapsulating Times ? ) The long trail back home ?…

  • Frank Gonzalez

    Our country owes a great debt to Mr. Mazur for risking his life and that of his family. It takes super guts to do what he did. Bank officials need to first visit the medical examiners office and view the bodies of those they helped kill by drug cartels as well as those who died from the drugs that they helped bring into this country, and then be placed in jail for a very long time. That will be the shot heard by the other banks.

  • Daniel Balestriere

    The Infiltrator gives an outstanding insight into the world of illegal drug money laundering. Bob Mazur and his fellow undercover agents risked their lives and infiltrated the organization of one of the most cold blooded criminals of all time, Pablo Escobar. Mazur and his cohorts should have been awarded the US Treasury Department Medal of Valor for their outstanding work. The book is an outstanding read.

  • John

    I am neither surprised nor shocked by this story. The simple fact of the matter is that our systems are corrupts and have been corrupt for decades. Corruption is the rule as long as you can get away with it. Playing by the rules is for small fries. Welcome to the world of Corporate business…anything goes as long as the profits outweigh the risk…just ask BP about that one.

  • Guzzo the Contrarian – Wachovia – Getting Dirty Money Clean

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  • Mystery Man | Wagner Magazine

    [...] Watch the PBS Need to Know episode on June 1, 2010, that used Bob Mazur as a source, “Getting Dirty Money Clean: A Need to Know investigation reveals just how common it is for major U.S. banks to launder money from drug traffickers” HERE [...]