Drug money has a way of sprawling. And some of it may have reached Bank of America.
A federal probe into Los Zetas, a Mexican drug cartel, claims that the group has been laundering money through accounts at BofA, according to a recent report in The Wall Street Journal.
An FBI affidavit filed in Texas last month says that the Mexican drug cartel has been reportedly funneling cash through a Texas-based racehorse business with BofA accounts. The U.S. government has described Los Zetas in the past as "the most technologically advanced, sophisticated and dangerous cartel operating in Mexico." Tremor Enterprises LLC, the horse business, was for its part allegedly run by Jose Trevino Morales, a U.S. citizen with two brothers in Los Zetas.
In the past, Mexican drug syndicates have allegedly used BofA accounts to buy planes to transport cocaine, according to Bloomberg. Between 2004 and 2007, the bank was also the alleged destination for almost $10 million in illicit funds from an influential political family in Equatorial Guinea.
BofA has admitted such errors in the past. In 2006, officials acknowledged they'd failed to catch South American clients laundering $3 billion through one of its Manhattan branches, according to The New York Times.
Just to be clear, BofA hasn't been accused of any wrongdoing, and according to sources cited by the WSJ, the bank is cooperating with the FBI investigation.
Still, if Los Zetas has indeed been shifting a million dollars a month through accounts held at BofA, as the federal probe claims, it suggests the bank might still have some kinks to work out in its defenses against money laundering.
Bank Of America
In July, a federal probe revealed claims that the drug cartel Los Zetas had used accounts at Bank of America <a href="http://www.huffingtonpost.com/2012/07/09/los-zetas-laundered-money-bank-america_n_1658943.html" target="_hplink">to launder drug money.</a> Drug traffickers allegedly used accounts at BofA to purchase aircraft to transport cocaine, <a href="http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html" target="_hplink">according to Bloomberg.</a>
Since it's founding in 1940, the Vatican Bank has reportedly been involved in transactions with criminals and shady politicians, the German paper <a href="http://www.spiegel.de/international/europe/a-growing-vatican-bank-scandal-threatens-catholic-church-image-a-842140.html" target="_hplink"><em>Spiegel</em> reports</a>. One such incident involved Roberto Calvi, known as "God's Banker" because of his extensive dealings with the Vatican, who was found hanged beneath London's Blackfriars Bridge in 1982, <a href="http://www.guardian.co.uk/uk/2012/may/12/roberto-calvi-blackfriars-bridge-mafia" target="_hplink"><em>The Guardian</em></a> reports. Renewed allegations of the Vatican Bank <a href="http://www.thedailybeast.com/articles/2012/03/21/jp-morgan-chase-closes-vatican-bank-account.html" target="_hplink">laundering money</a> may have contributed to the forced departure of former bank head Ettore Gotti Tedeschi, <a href="http://www.telegraph.co.uk/news/worldnews/europe/vaticancityandholysee/9319414/Ex-head-of-Vatican-bank-planned-to-give-dossier-to-Pope.html" target="_hplink"><em>The Telegraph</em> reports.</a>
In 2009, UBS claimed that U.S. government pressure was forcing it to close nearly 19,000 offshore accounts, according to <a href="http://www.nytimes.com/2009/01/09/business/09ubs.html" target="_hplink"><em>The New York Times</em></a>. Such accounts were regarded as a means of avoiding disclosures to the IRS and could be viewed "as criminal evidence, not just of tax evasion but also of money laundering," <a href="http://www.nytimes.com/2009/01/09/business/09ubs.html" target="_hplink"><em>NYT</em> reported at the time</a>.
In 2005, Riggs Bank plead guilty to laundering the money of former Chilean dictator Augusto Pinochet and the government of Equatorial Guinea, <a href="http://www.usatoday.com/money/industries/banking/2005-01-27-riggs_x.htm" target="_hplink"><em>USA Today</em> reported</a>. The laundering scandals led to the sale of Riggs to PNC Bank, according to <a href="http://www.bizjournals.com/washington/print-edition/2012/04/27/following-scandal-riggs-bank-sold-to.html" target="_hplink"><em>The Washington Business Journal</em></a>
In 2010, Wachovia was fined $150 million by U.S. authorities for allegedly laundering millions of dollars for Mexican drug cartels, <a href="http://www.nytimes.com/2010/03/18/business/18launder.html" target="_hplink"><em>The New York Times</em></a> reports.
In 2010, Mario Ernesto Villanueva Madrid, the former governor of the state of Quintana Roo, was indicted for conspiring to smuggle "hundreds of tons" of illegal drugs into the U.S. as well as laundering $19 million through a Lehman Brothers account, <a href="http://www.bloomberg.com/news/2010-05-10/former-mexican-governor-used-lehman-to-launder-drug-funds-u-s-says.html" target="_hplink">Bloomberg reports</a>. Five years earlier, former Lehman Brothers broker Consuelo Marquez admitted she funneled about $11 million in drug proceeds through a Lehman account.
In 2009, Credit Suisse was fined $536 million by U.S. authorities for allegedly hiding the identities of Iranian clients in order to move millions of dollars into the U.S. banking system against U.S. sanctions, the <a href="http://news.bbc.co.uk/2/hi/8417239.stm" target="_hplink">BBC reports</a>. It was also accused of similar activity for Libyan, Burmese and Sudanese clients.
In 2007, the U.S. Justice Department charged Lloyds Bank with helping its client Lycourgos Kyprianou, former chairman of Cypriot software maker AremisSoft, launder millions of dollars, <a href="http://www.forbes.com/2007/10/16/lloyds-tsb-cyprus-markets-equity-cx_vr_1016markets10.html" target="_hplink"><em>Forbes</em></a> reports. In 2009, the British-based bank was fined $350 million for disguising funds from Iran and Sudan so that they could be funneled into the U.S. banking system against national sanctions, <a href="http://www.guardian.co.uk/business/2009/jan/10/lloyds-forfeits-350m-to-us" target="_hplink"><em>The Guardian</em> reports</a>.
In July 2012, the Senate Permanent Subcommittee on Investigations announced that it would detail its findings on breakdowns of money laundering safeguards at HSBC, Reuters reports. According to Reuters, HSBC has been the subject of investigation by the Senate and two U.S. attorney offices since January. (h/t <a href="http://www.chicagotribune.com/business/sns-rt-us-hsbc-launderingbre8680x3-20120709,0,6711100.story" target="_hplink"><em>Chicago Tribune</em></a>)