MIAMI (Reuters) — The Wachovia Bank, a unit of Wells Fargo & Company, has agreed to pay $160 million to settle accusations that it laundered Mexican drug money.

Under the agreement, Wachovia will forfeit $110 million, representing the proceeds of illegal narcotics sales that were laundered through the bank, the United States attorney’s office in the Southern District of Florida said.

The bank will pay an additional $50 million fine to the Treasury.

A deferred prosecution agreement with the Justice Department resolved charges that the bank had willfully failed to establish a program to guard against money laundering. It also resolved Wachovia’s admitted failure to identify, detect and report suspicious transactions in third-party payment processor accounts.

A Wachovia representative was not immediately available for comment.

The federal prosecutor in Miami began an investigation about three years ago, focusing on the supposed role of a Wachovia unit in processing illegal money transfers for Mexican exchange houses along the border between the United States and Mexico. The investigation predated Wachovia’s takeover by Wells Fargo.