Wells Fargo unit in talks to settle money laundering allegations

17 March 2010

A unit of investment bank Wells Fargo is in talks with the US Department of Justice to resolve allegations that failures in its controls allowed money to be laundered through the institution.

An investigation into Wachovia Bank led by the US attorney's office in Miami has been ongoing for the past three years, the Wall Street Journal reported.

This predates the acquisition of the business by Wells Fargo at the end of 2008.

One of the bank’s units is believed to have processed money transfers from exchange houses in Mexico, thought to be from drug traffickers in the country.

Reports suggest that a settlement could take place during the forthcoming weeks although whether this will involve a financial incentive is currently unclear.

In a statement the bank said: “We look forward to resolving this issue, and are committed to maintaining compliant and effective anti-money-laundering policies and practices, and a strong compliance and risk management culture across the integrated organization.”

Earlier in the year, the bank was quoted by the news provider as saying that it is paying fines and making agreements as part of a bid to resolve the situation.

By Jim Ottewill