Why Is Wells Fargo Still In Business?
As people who read me regularly might know, Wells Fargo has been long been my poster boy for criminal banking activity. For most of this century, the bank has essentially been a criminal enterprise, ripping off their customers and engaging in massive fraud that involved millions of unauthorized accounts. The bank has also engaged in mortgage fraud and price manipulation in the foreign exchange market. So I guess it should be no surprise that the bank ended up also laundering money for the Sinaloa drug cartel.
According to Business Insider, a Wells Fargo banker has pled guilty to opening accounts for clients he knew to be working for the powerful Mexican drug cartel. The cartel recruited what were essentially couriers to pick up bags of cash from across the United States and then deposit them into so-called “funnel accounts” that were set up with the help of the Wells banker in denominations below the banks’ regulatory reporting threshold. The funds were then wired to shell companies in Mexico controlled by the cartel. The banker also admitting to making some of these wire transfers himself with the full knowledge of where they would end up. According to the DOJ, the cartel managed to launder close to $20 million over the course of a couple of years from 2014 to 2016.
This particular money laundering scheme is as basic as it gets and the fact that Wells anti-money laundering controls did not flag these accounts with repeated cash deposits slightly below the reporting threshold seems almost inconceivable and hints at willful disregard. What’s even more incredible is that all this was happening from 2014-2016 when the company was already under incredible scrutiny in the wake of not only its mortgage fraud but also the emerging unauthorized account opening scandal. The final disturbing note from this scandal is that these funnel accounts were also set up at other US banks, although those have not yet been named by the DOJ. That, of course, implies that other banks’ anti-money laundering controls were either equally deficient or worse.
Wells Fargo just revealed its new logo and an ad campaign that described the “real change” at the bank, declaring “This is Wells Fargo”. And indeed it is. It’s the same old criminal outfit it has been for over a decade. But yet another branding change should solve the problem once again.