Western Union has agreed to settle $586m after admitting that it violated US anti-money laundering laws by ignoring evidence that thousands of its agents were involved in sending illicit cash to criminals.
The charge included sending illicit cash to human traffickers in China and bookies in Costa Rica, the US Department of Justice announced. From 2004 to 2012, Western Union, “processed hundreds of thousands of transactions” that were part of global fraud schemes, the DoJ said.
The company has agreed to a deferred prosecution deal with the DoJ and a related settlement with the Federal Trade Commission.
Western Union admitted to criminal violations including failure to maintain an effective anti-money laundering programme and aiding and abetting wire fraud. The company’s share price dropped 3.3% on the news.
“As this case shows, wiring money can be the fastest way to send it — directly into the pockets of criminals and scam artists,” said David Bitkower, acting assistant attorney-general. Prosecutors said that criminals contacted American victims — many of them elderly — and promised lottery winnings, discounted goods or job offers, or posed as family members in need of financial assistance.
The crooks told victims to wire funds through Western Union, and participating agents entered false names or addresses into the payment system to conceal the criminals’ identities.
“Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds,” the DoJ said.
The company failed to ensure that its agents complied with a federal law that requires financial institutions to notify authorities of transfers exceeding $10,000.
Instead, Western Union, which operates in more than 200 countries, looked the other way as its agents in the US, UK and Spain repeatedly transferred sums that fell just below that figure.
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