Good point---"follow the money." This sleeper scandal came to mind when I read your post.
How a big US bank laundered billions from Mexico's murderous drug gangs [April 2011]
Wachovia Drug Money Laundering
The first link is from the Guardian. To my knowledge it was the most indepth article published.
A review of some of the facts [The entire article should be read]:
"On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel."
"During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo."
Criminal proceedings were brought against Wachovia, though not against any specific individual.
The case never came to court.
In March 2010, Wachovia settled the biggest action to date brought under the US bank secrecy act.
Wachovia paid $110m in forfeiture, and a $50m fine.
"Wachovia was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn [between May 2004-May 2007]– a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business."
Wachovia's total fine was less than 2% of the bank's $12.3bn profit for 2009.
"At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were "the only liquid investment capital" available to banks on the brink of collapse. "Inter-bank loans were funded by money that originated from the drugs trade," he said. "There were signs that some banks were rescued that way.""
[Note to Hoosiermama: If the above paragraph is true, How could anyone follow THIS money trail?] The only entity with the means to do so is the government, and they don't have the will (foremost, because it would require the government to indict itself)---except in selected cases, like Wachovia, where punishing the crime became self-serving to the government.
The Guardian article was written with the assistance of Martin Woods (one of the most important whistleblowers of our time.") If for no other interest, the article is worth a read to hear his story. I barely touched the highlights---and perhaps not even the most important ones.
Martin Woods: "Is it in the interest of the American people to encourage both the drug cartels and the banks in this way? Is it in the interest of the Mexican people? It's simple: if you don't see the correlation between the money laundering by banks and the 30,000 people killed in Mexico, you're missing the point."
One last note: The article suggests that the settlement doesn't preclude additional liability on the specifics of this case---which just tells me that the government has a powerful inducement for Wachovia (purchased by Wells Fargo)to play ball.
http://www.nytimes.com/2010/03/18/business/18launder.html
Wachovia and U.S. Settle a Money Laundering Case
By REUTERS
Published: March 17, 2010
MIAMI (Reuters) — The Wachovia Bank, a unit of Wells Fargo & Company, has agreed to pay $160 million to settle accusations that it laundered Mexican drug money.
Under the agreement, Wachovia will forfeit $110 million, representing the proceeds of illegal narcotics sales that were laundered through the bank, the United States attorney’s office in the Southern District of Florida said.
The bank will pay an additional $50 million fine to the Treasury.
(snip)
//
http://query.nytimes.com/gst/fullpage.html?res=9D02E1D61E3BF933A25754C0A96E9C8B63&pagewanted=all
Wachovia hires a Treasury insider to lift it out of its banking woes
By Eric Dash
Published: July 10, 2008
From his perch inside the Treasury Department, Robert Steel has wrestled with the troubles plaguing America’s financial industry. Now he will confront those problems up close at the Wachovia Corporation, one of the nation’s largest banks.
On Wednesday, Wachovia ended its six-week search for a new leader when it named Steel, the under secretary of the Treasury for domestic finance, as its chief executive.
(snip)
Steel, a former vice chairman at Goldman Sachs, played a crucial role in formulating the Bush administration’s response to the running crisis in the mortgage markets. He also championed a controversial plan by Treasury Secretary Henry Paulson Jr., a colleague at Goldman, to overhaul the financial industry’s regulatory apparatus.
(snip)
//
http://freerepublic.info/focus/f-news/1965976/posts
Duke bolsters legal team in fighting lawsuit (Duke Hires Jamie Gorelick)
The Herald-Sun (Durham) ^ | Feb 6, 2008 | By Ray Gronberg
Posted on Wednesday, February 06, 2008 1:14:50 PM by Ken H
DURHAM — Duke University has added a former deputy attorney general of the United States to the legal team that will defend it against a federal civil-rights lawsuit filed by three members of the 2005-06 men’s lacrosse team.
Court papers filed this week indicate that Washington, D.C., attorney Jamie Gorelick will assist two Greensboro litigators in representing the school.
They’re also the attorneys of record for the Duke University Police Department, Board of Trustees Chairman Robert Steel, school President Richard Brodhead and numerous other university officials.
(snip)
//
wiki:
Robert King “Bob” Steel (b. August 3, 1951) is an American business leader and an expert on financial institutions and markets. In June 2010, he was named Deputy Mayor for Economic Development by New York City Mayor Michael Bloomberg. Previously, he had served as Under Secretary for Domestic Finance of the United States Treasury, as the last president and CEO of Wachovia Corporation, and as vice chair of Goldman Sachs.
(snip)
U.S. Treasury, 2006–08 ...
Wachovia/Wells Fargo, 2008–2010 ...
He is also a member of the Pew Charitable Trusts Task Force on Financial Reform, which advises the United States Congress on critical financial reform issues. In December 2009, he testified before the Joint Economic Committee of the U.S. House and Senate regarding financial reform.[40] He is also a member of The FDIC Advisory Committee on Economic Inclusion (ComE-IN), which focuses on how to improve underserved and low- and moderate-income consumers’ access to the financial mainstream.[41]
Although Steel was appointed to his Treasury post by a Republican president, he does not regard himself as an ideologue, and has been occasionally criticized for his political independence. For example, although Steel hosted fundraisers at his home for John McCain,[5] columnist Bob Novak complained that Steel is “no Republican,” citing that he had worked with Clinton Treasury Secretary Robert Rubin at Goldman Sachs and made campaign donations in 2002 to Democrats from his home state of North Carolina.[42]