Western Union, one of the largest money sending services on the planet, will have to pay up $586 million to the US Department of Justice for violations connected to anti-money laundering policies. This is by far the harshest fine imposed by the DoJ on a money services business.
Illegal Sports Betting, Fraud, and Human Trafficking
The list of violations the DoJ has come up for Western Union is a long and damning one. The company is being accused of facilitating illegal sports betting operations in Costa Rica, processing numerous transactions to scam artists around the globe, and even facilitating money transfers for connected to human trafficking.
When it comes to illegal gambling, the prosecutors claim that Western Union was warned about such transactions as early as 1997, but they decided to turn a blind eye. Florida residents used the service to fund illegal sports betting activities in Costa Rica, and the DoJ recorded such transactions throughout 2011 and 2012.
Although the DoJ is serious about putting an end to any and all illicit gambling activities, other accusations are far more serious. For years, Western Union has been the favorite channel for many fraudsters who targeted their victims with false promises of big lottery wins, employment opportunities, and more. Some of those targeted fell for the scam artists’ rouse and wired them the money in exchange for their assistance in “making sure everything goes smooth.”
The most serious of all, however, all the implications of human trafficking. The DoJ tracked transactions from illegal Chinese immigrants who used Western Union to pay for services of bringing them to the country. The company failed to do anything about these transactions, showing a complete lack of willingness to combat criminal practices.
Western Union Accepts the Fine
In cases such as this, companies are usually quick to deny charges and defend themselves. However, Western Union apparently didn’t have much to say to its defense. They admitted to criminal violations, failure to implement proper anti-money laundering policies, and assisting in wire fraud.
Of course, the case won’t go to court, but it will be settled internally between the company, the DoJ, and the Federal Trade Commission (FTC). It remains to be seen if the hefty fine will do anything to change the company’s approach to money transfer services or if it is merely a slap on the wrist in the grand scheme of things.