The world’s largest money transfer company, Western Union, has agreed to pay a $586 million to settle charges that its anti-money-laundering controls were too lack, enabling millions of dollars of prohibited transactions to be completed.
According to a report in Bloomberg, the U.S. Justice Department (DoJ) announced the settlement in which Western Union admitted the wrongdoings.
“Wiring money can be the fastest way to send it — directly into the pockets of criminals and scam artists,” said Acting Assistant Attorney General David Bitkower in the report. “Western Union is now paying the price for placing profits ahead of its own customers.”
The DoJ and Federal Trade Commission joined forces to impose the largest penalty ever lodged against a money transfer service and is part of a push from regulators to reach settlements in the last hours before Donald Trump takes presidential office. As a result of the settlement, Western Union said it expects to take a charge of $570 million in the fourth quarter, which it is slated to report on Feb. 9.
“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,” the company said in a statement, according to Bloomberg. In the complaint, the U.S. government said it found hundreds of millions of dollars was being transferred to China in transactions that are created to get around the reporting requirements under federal bank laws. The government contends a lot of the money was sent to human smuggles from illegal immigrants.
What’s more, the lawsuit contended agents at Western Union were “complicit” in the scams that ended up defrauding U.S. citizens. The fraudsters pretended to be overseas family members in need or money or tricked people in the U.S. with fake prize money and/or jobs. The victims were told to send money via Western Union. The company’s agents were also complicit in schemes that defrauded people in the U.S. The government said fraudsters contacted victims in the U.S. and falsely posed as family members in need or promised prizes or job opportunities. They then directed the victims to send money through Western Union, and Western Union agents processed the payments in return for a cut of the proceeds.