Western Union settles U.S. money laundering allegations for $586 mln

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By Joel Schectman and Diane Bartz | WASHINGTON

WASHINGTON Western Union Co agreed to pay
$586 million and admitted to turning a blind eye as criminals
used its service for money laundering and fraud, the U.S.
Department of Justice and the Federal Trade Commission said in
statements on Thursday.

“Western Union is now paying the price for placing profits
ahead of its own customers,” said Acting Assistant Attorney
General David Bitkower.

Western Union admitted “to aiding and abetting wire fraud”
by allowing scammers to process transactions, even when the
company realized its agents were disguising transactions to
avoid detection.

And with the help of Western Union agents, Chinese
immigrants used the service to send hundreds of millions of
dollars to pay human smugglers, wiring the money in smaller
increments to avoid federal reporting requirements, U.S.
authorities said.

Fraudsters offering fake prizes and job opportunities
swindled tens of thousands of U.S. consumers, giving Western
Union agents a cut in return for processing the payments,
authorities said. Between 2004 and 2012, the company knew of
fraudulent transactions but failed to take steps that would have
resulted in disciplining of 2,000 agents, authorities said.

A Western Union spokesman said that the company didn’t “do
as much as it should have” to oversee its agents between 2004
and 2012 but is committed to improving its procedures.

The settlement will fund refunds for customers who were
victims of scams, authorities said.



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