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Western Union to pay $586m to settle AML charges

19 January 2017  |  5968 views  |  2 cash

Western Union has agreed to pay $586 million to settle US criminal and civil charges that it wilfully failed to maintain an effective anti-money laundering programme and aided and abetted wire fraud.

According to the Justice Department, admissions from Western Union show that between 2004 and 2012 the firm violated US laws by processing hundreds of thousands of transactions for its agents and others involved in an international consumer fraud scheme.

Crooks contacted victims in the US and falsely posed as family members in need or promised prizes or job opportunities before directing the dupes to send money through Western Union to help their relative or claim their prize.

Various Western Union agents were complicit in these schemes, often processing the fraud payments for the fraudsters in return for a cut of the proceeds, say authorities.

Western Union is accused of knowing about the suspect agents yet refused to take action. For years the firm recorded customer complaints but failed to follow its own proposed guidelines on suspending agents.

Meanwhile, officials say that they also uncovered hundreds of millions of dollars being sent to China in structured transactions designed to avoid the reporting requirements of the Bank Secrecy Act. Much of the money was sent to China by illegal immigrants to pay their human smugglers.

Acting Assistant Attorney General Bitkower says: "As this case shows, wiring money can be the fastest way to send it - directly into the pockets of criminals and scam artists. Western Union is now paying the price for placing profits ahead of its own customers."

In a statement, Western Union says: "We share the government’s goal of protecting consumers and the integrity of our global money transfer network, and we worked hard to resolve these matters with the government."

Comments: (2)

Steven Hatton
Steven Hatton - Trusek Ltd - Amersham | 19 January, 2017, 20:17

Can the regulators ever credibly state they are operating in the interests of customers as oppposed to global corporate entities when they stand aside while banks refuse to support small Money Transfer Operators who operate within best AML practices and do nothing more than fine the equivalent of a drop in the ocean a company who was knowingly complicit in money laundering over an eight year period.

Staggering!!!

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A Finextra member
A Finextra member | 24 January, 2017, 10:11

If the PSR is looking for an area to focus on it should be the ability for Small MSB's to access the core banking services needed to compete with the big guys and remove the 'Tax' imposed on remitters by the banking 'establishment'  Having said this,  lets not lose sight of just how bad Western Union's behaviour has been here....  I am sure if this was a smaller business  that would not be able to survive getting caught with its fingers in the cookie jar, who couldnt pay the government off, and who's executive would therefore probably go to jail....

It is a sad reflection on the world we live in that, if you are big enough, Rolls Royce, BAE,  Western Union etc, that you can break the law (with the full knowledge of your executive) secure in the knowledge that if you dont get caught you get the Big Bonus, and ifyou do get caught, that your shareholders and customers will pay the Big fine.... No wonder 'Populism' is in the ascendency...    another description could be 'Exasperationalism'

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