HomeNewsBriefUS Banks Close Branches Along Mexico Border to Prevent Money Laundering
BRIEF

US Banks Close Branches Along Mexico Border to Prevent Money Laundering

MEXICO / 27 MAY 2015 BY DAVID GAGNE EN

Major US banks have recently closed branches along the southern border with Mexico in an attempt to crack down on money laundering, a reflection of the ease with which Mexican drug traffickers can legitimize illicit proceeds north of the border. 

In recent months, major banks such J.P. Morgan and Bank of America have closed their branches in the border town of Nogales, Arizona, reported The Wall Street Journal. Other banks, including Wells Fargo and Chase, have reportedly closed hundreds of customer accounts, many of which belonged to Mexican nationals. 

The anti-money laundering measures come amid tightening regulations stipulating that banks can be hit with stiff fines if they fail to adequately monitor suspicious accounts, reported National Public Radio

Banks on the Mexican side of the border have also recently stepped up their efforts to combat money laundering operations. Some Mexican banks have started refusing to accept US dollars, according to The Associated Press.  

InSight Crime Analysis

US banks have real reason to fear criminal networks will use their financial services to launder money. Arizona has previously been singled out as a principal money laundering destination for Mexican drug cartels, and bank executives told The Wall Street Journal that Southern California and the Rio Grande Valley in Texas are also high-risk border areas. As evidenced by the recent decisions, in some cases it is easier for banks to simply close accounts and branches rather than attempting to keep criminals from using their financial services. 

SEE ALSO: Coverage of the US-Mexico Border

Several high-profile cases point to the ability of Mexican drug traffickers to legalize their illicit funds via the US banking system. In 2010, Wachovia (which is now Wells Fargo) reached an agreement with the US government after prosecutors found that at least $110 million in drug proceeds had been laundered through the bank. In 2012, the Federal Bureau of Investigation (FBI) also uncovered a scheme in which Mexico's Zetas cartel laundered money through a horse racing enterprise by using Bank of America accounts.

In addition, the decisions by major banks to close their border branches suggest that putting pressure on banks -- rather than going after individuals or criminal networks -- may be the most effective way to combat money laundering. A recent legal decision, in which a conviction was overturned in the Zetas horse racing case, demonstrates just how difficult it can be for prosecutors to go after the money launderers themselves. 

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

ARGENTINA / 29 JAN 2021

While unrest gripped much of Latin America in 2019, it was the coronavirus that took center stage and ripped through…

ENVIRONMENTAL CRIME / 27 AUG 2021

Seizures of illegally harvested octopus off Mexico’s Yucatán peninsula are shedding light on how corruption in a coastal community facilitates…

BRAZIL / 22 NOV 2021

For the last few weeks, the twists and turns in the case of the Pharaoh of Bitcoins have constantly made…

About InSight Crime

THE ORGANIZATION

Join Us This #GivingTuesday in Exposing Organized Crime

24 NOV 2022

For over twelve years, InSight Crime has contributed to the global dialogue on organized crime and corruption. Our work has provided policymakers, analysts, academics, journalists, and the general public with…

THE ORGANIZATION

Like Crime, Our Coverage Knows No Borders

18 NOV 2022

The nature of global organized crime means that while InSight Crime focuses on Latin America, we also follow criminal dynamics worldwide. InSight Crime investigator Alessandro Ford covers the connections between Latin American and European…

THE ORGANIZATION

Using Data to Expose Crime

11 NOV 2022

Co-director Jeremy McDermott made a virtual presentation at a conference hosted by the United Nations Office on Drugs and Crime (UNODC). The ‘Sixth International Conference on Governance, Crime, and Justice…

THE ORGANIZATION

InSight Crime ON AIR

4 NOV 2022

InSight Crime Co-director Steven Dudley was interviewed for the podcast The Rosenberg Case: A Tale of Murder, Corruption, and Conspiracy in Guatemala, which explores the potential involvement of then president, Álvaro Colom,…

WORK WITH US

Work With Us: Research Internship and Editorial Internship

31 OCT 2022

InSight Crime, a think tank dedicated to the study of organized crime and citizen security in the Americas, is seeking interns and investigators to join its dynamic, multinational team.