In one of the largest money laundering case brought against a check cashing company to date, Supermail’s officers and several employees went to jail for years and were personally subject to fines of up to two times their gains from their crimes. Supermail itself was also subject to 200% fines. This for “laundering” $3.2 million in connection with a sting operation dubbed ‘Operation Muletrain.’
Now, take a look at this week’s settlement of the prosecution of Wachovia for money laundering. Wachovia laundered possibly $420 billion.
Miami U.S. Attorney Jeffrey H. Sloman, whose office led the three-year probe said, “Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations by laundering at least $110 million in drug proceeds. Corporate citizens, no matter how big or powerful, must be held accountable for their actions.”
Under the agreement, Wachovia agreed to forfeit $110 million to the U.S., which the Justice Department said represented proceeds of illegal narcotics sales that were laundered through Wachovia. It will also pay a $50 million fine to the U.S. Treasury.
The agreement means Wachovia and its executives will avoid criminal prosecution in return for the $160 million payment and significant improvements in its anti-money laundering program. If those and other conditions are met within one year, potential criminal charges for failure to maintain a system to detect money launderers will be dropped. …
The $160 million fine and forfeiture represents the biggest penalty ever imposed under the Bank Secrecy Act, which requires financial institutions to keep close tabs on suspicious transactions that could indicate money is being laundered from criminal enterprises. According to prosecutors, Wachovia’s program was woefully inadequate and bank executives knew it, meaning that numerous red flags were missed over a three-year period.
There is no way that management was unaware of the anti-money laundering controls that should have been in place! Compliance with currency transfer reporting requirements is fundamental to operating (or auditing) a banking operation. Would criminal culpability have been so hard to prove?
Is this another case of letting the little people suffer the consequences of their actions, while bailing out the companies (and their executives) “too big to fail”? Was Wachovia “too big to prosecute?”