hr: Money

Wachovia Corp. is the fourth largest Banking chain in the US. It is one of the largest providers of diversified financial services in the US with branches in over 21 states in the US. With 40 offices around the world, it also has a large global presence, especially in the Latin American Countries.

Photo Credit: marklarson

However, it has recently come under the scanner as Federal prosecutors have found evidence of Drug Money laundering to Mexican and Columbian money-transfer companies. The probe, is also looking at other large banks.

Apparently, Wachovia provides remittance services to these Latin American countries. These services enable workers in the US to send money back to their family and friends in other countries. For these services, banks charge a high price. But these facilities can also be misused by criminals who transfer illicit money to these countries.

The probe could not have come at a worse time for Wachovia which has recently agreed to pay $144 million in order to settle charges that it did not prevent telemarketers from taking advantage of elderly clients.

On the 14th of April, it posted a quarterly loss for the first time since 2001. Because of these problems, the bank has decided to cut dividends, and wants to raise $7 Billion  in capital.