Wachovia Bank, a unit of Wells Fargo & Co., confirmed it will pay $160 million to settle a federal investigation into whether the bank's lax controls enabled Mexican exchange houses to launder drug money.

The U.S. attorney's office in Miami led the probe, begun about three years ago and focused on the role a Wachovia correspondent-bank unit played in processing illegal money transfers for the exchange houses. The exchange houses, known as casas de cambio, line the U.S.-Mexican border and serve as a hub in the global remittance business that allows U.S. immigrants to send money back to Latin America to help relatives.

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