HomeNewsBriefMexican Cartels and the US Banking System
BRIEF

Mexican Cartels and the US Banking System

MEXICO / 2 APR 2011 BY INSIGHT CRIME EN
  • An investigation by British newspaper The Observer details how the Mexican-based Sinaloa Cartel laundered billions of dollars through Wachovia, once one of the biggest players in the American banking industry. The scandal began to unfold in 2006 when Mexican authorities intercepted a large drug and money cargo on a plane in Ciudad del Carmen, in the Gulf of Mexico. Agents from the Drug Enforcement Administration (DEA), the Internal Revenue Service (IRS) and other agencies spent almost two years investigating the haul, which led them to Wachovia. They found that some $378.4 billion dollars had been transferred into accounts at the bank via Mexican “casas de cambio” (currency exchange houses). Wachovia was ordered in March 2010 to pay a total of $160 million dollars (part as a fine and part as forfeiture) for failing to track large sums of money that were connected to Mexican organized crime. According to Martin Woods, senior anti-money laundering officer for the bank during the evolution of the scandal, "What happened at Wachovia was symptomatic of the failure of the entire regulatory system to apply the kind of proper governance and adequate risk management which would have prevented not just the laundering of blood money, but the global crisis."
  • As violence has surged in many parts of Mexico, Mexico City has seen a different pattern unfolding. Many kingpins from the major cartels established themselves in the capital city to run money laundering operations and hide out from enemies, which translated into lower murder rates for the city. But since last year a series of beheadings and homicides have shaken this apparent calm, giving rise to fears of large-scale drug violence. But authorities analyze the situation otherwise, reports the Associated Press. According to the report small-time gangs are behind the new wave of violence, caught up in disputes over micro-trafficking territories in the capital. Despite these groups' connection with the major drug trafficking organizations, authorities say it is unlikely that the violence is a result of fighting between cartels, as they do not dispute over such small markets. Concerns over rising drug sales in the city are backed by information on drug consumption, according to Patricia Reyes, adviser to the city's Health Secretary (Secretaria de Salud). The official said that eight percent of students in high schools have now experimented with drugs, compared to some 2.5 percent in 1998.
  • In El Salvador, El Diario de Hoy reports that small-scale gangs are apparently working to penetrate the country's security forces in order to corrupt officers, obtain intelligence, and stock up on arms, according to a statement from Defense Minister David Munguia Payes. InSight has reported that common criminals are often used by major players in Colombia to carry out tasks such as these. It would be no surprise if major criminal organizations in El Salvador and Central America are following the same tactic, commissioning small groups to pursue their ends.
share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

ECUADOR / 13 OCT 2022

US dollars have been flooding into Venezuela and Ecuador, with authorities unaware of how widespread their use has become…

GULF CARTEL / 29 JUL 2022

Mexican authorities crushed 23 "narco-tanks," while 630 armored vehicles have been confiscated since 2018.

BRAZIL / 14 APR 2021

Messer, the notoriously prolific money launderer, was able to move millions of dollars through Brazil’s emerald mining industry, adding yet…

About InSight Crime

THE ORGANIZATION

Escaping Barrio 18

27 JAN 2023

Last week, InSight Crime published an investigation charting the story of Desafío, a 28-year-old Barrio 18 gang member who is desperate to escape gang life. But there’s one problem: he’s…

THE ORGANIZATION

Europe Coverage Makes a Splash

20 JAN 2023

Last week, InSight Crime published an analysis of the role of Amsterdam’s Schiphol Airport as an arrival hub for cocaine and methamphetamine from Mexico.  The article was picked up by…

THE ORGANIZATION

World Looks to InSight Crime for Mexico Expertise

13 JAN 2023

Our coverage of the arrest of Chapitos’ co-founder Ovidio Guzmán López in Mexico has received worldwide attention.In the UK, outlets including The Independent and BBC…

THE ORGANIZATION

InSight Crime Shares Expertise with US State Department

16 DEC 2022

Last week, InSight Crime Co-founder Steven Dudley took part in the International Anti-Corruption Conference organized by the US State Department’s Bureau of Democracy, Human Rights, & Labor and…

THE ORGANIZATION

Immediate Response to US-Mexico Marijuana Investigation

9 DEC 2022

InSight Crime’s investigation into how the legalization of marijuana in many US states has changed Mexico’s criminal dynamics made a splash this week appearing on the front page of…