“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.