Wachovia part of probe into Latin drug money: report

CHICAGO (Reuters) - Wachovia Corp WB.N is being investigated by federal prosecutors as part of a probe into alleged laundering of drug proceeds by Mexican and Colombian money-transfer companies, according to a report in the Wall Street Journal on Saturday.

An official of Charlotte, North Carolina-based Wachovia, the country's fourth largest banking firm, said the company is cooperating with the probe, the newspaper said. The Journal attributed its information about the probe to "people familiar with the matter."

A Wachovia spokeswoman did not immediately return a call seeking comment.

Wachovia is one of several large banks being investigated for relationships with the money-transfer companies, the Journal said.

Regulators said on Friday that Wachovia has agreed to pay as much as $144 million to settle allegations it failed to help consumers who fell prey to schemes operated by telemarketers that maintained accounts at the bank.

Wachovia this month posted a surprise first-quarter loss as credit problems from mortgages and other debt soared.

(Reporting by Kyle Peterson, editing by Patricia Zengerle)