The embattled bank admitted it failed to stop an estimated 110 million dollars from being sent from the US to Mexico by wire transfer that was used to buy cocaine-transporting aircraft.
The Drug Enforcement Administration said Wachovia-run foreign exchange houses in Mexico -- or casas de cambio (CDCs) -- were involved in the illicit trades between 2004 and 2007.
At least four aircraft bought with the cash were later seized along with large quantities of cocaine, by unnamed foreign governments.
The DEA said the bank had agreed to pay the fine to "resolve charges that it willfully failed to establish an anti-money laundering program."
"In light of Wachovia's willingness to acknowledge responsibility for its actions and omissions... the government has agreed to defer prosecution of the criminal charge in the information for 12 months," the agency said.
Wachovia, which was taken over by Wells Fargo in a crisis-inspired fire sale in 2008, was given five days to pay the fine.
Although Wachovia admitted that 110 million dollars could have been laundered, the DEA said "Wachovia failed to effectively monitor for potential money laundering activity more than 420 billion dollars in financial transactions with the CDCs."
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