Security & Fraud

Western Union Slapped With $60M Fine Over AML Lapses

Western Union has agreed to pay a $60 million fine as part of a consent order with the New York State Department of Financial Services.

According to a press release, Financial Services Superintendent Maria T. Vullo announced on Thursday (Jan. 4) the fine for violations of the New York Bank Secrecy Act and anti-money laundering laws. An inquiry by the Department of Financial Services found that for longer than 10 years, Western Union failed to create and maintain an anti-money laundering compliance program to deter, detect and report any money laundering via its payment network.

Additionally, the DFS investigation found that senior Western Union executives and managers ignored and failed to report suspicious transactions to their China locations by several high-volume agents in New York, other states and around the globe. According to the DFS, the money could have gone to aid in human trafficking.

“Western Union executives put profits ahead of the company’s responsibilities to detect and prevent money laundering and fraud, by choosing to maintain relationships with and failing to discipline obviously suspect, but highly profitable, agents,” said Vullo. “DFS will not tolerate unlawful activity that undermines anti-money laundering laws and endangers the integrity of our financial system.”

The DFS noted that Western Union has a history of compliance issues. This includes an incident in 2002, when the DFS’s predecessor agency, the New York State Banking Department, performed an investigation and found that Western Union did not create effective agent monitoring procedures, failed to find suspicious transactions and did not file activity reports of suspicious activities.

In addition, in a January 2017 agreement with the U.S. Department of Justice, Western Union admitted to federal criminal offenses of failing to implement an effective anti-money laundering program under the Bank Secrecy Act, as well as aiding and abetting wire fraud, said the DFS.


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