The U.S. Department of Justice strikes again, this time cracking down on the largest money transfer company in the world, Western Union. Its customers can send cash to more than 200 countries within minutes, a service that criminals managed to exploit. WU is guilty of "aiding and abetting wire fraud" and will pay a huge $586 million fine.
The DOJ and Federal Trade Commission investigated transactions involving hundreds of millions of dollars sent to China. Wiring the money was the method of choice because transactions could be structured in such a way as to avoid US reporting requirements.
At some point, WU agents became aware of the activity but turned a blind eye. Why? They made good money on the hefty fees charged on those transactions. For example, say you’re sending $500 to the US and you use your credit/debit card, as most of us would. Your fee would be approximately $49.99 if you want it available to pick up at an agent location within minutes. Customers may opt to have the money sent to a bank account within 2 days, which would drop the fee to around $20.
“Our investigation uncovered hundreds of millions of dollars being sent to China in structured transactions designed to avoid the reporting requirements of the Bank Secrecy Act, and much of the money was sent to China by illegal immigrants to pay their human smugglers,” said U.S. Attorney Eileen M. Decker.
Illegal online gambling transactions were also at the core of the case. The DOJ report revealed, “Western Union has been on notice since at least December 1997, that individuals use its money transfer system to send illegal gambling transactions from Florida to offshore sportsbooks. Western Union knew that gambling transactions presented a heightened risk of money laundering and that through at least 2012, certain procedures it implemented were not effective at limiting transactions with characteristics indicative of illegal gaming from the United States to other countries.”
Source:
‘Western Union Admits Anti-Money Laundering and Consumer Fraud Violations, Forfeits $586 Million in Settlement with Justice Department and Federal Trade Commission’, justice.gov, January 19, 2017
Vanenhox
7 years ago
I wonder whether or not, if on balance, Western Union still made money on all these hundreds of millions of dollars of transactions? I imagine that they didn't and that the fine will serve as a deterrent in the future. I would guess that over a half a billion dollars in fines is probably a sum that ate up all their profits.
I wonder whether or not, if on balance, Western Union still made money on all these hundreds of millions of dollars of transactions? I imagine that they didn't and that the fine will serve as a deterrent in the future. I would guess that over a half a billion dollars in fines is probably a sum that ate up all their profits.
Show morePlease enter your comment.
Your comment is added.
Judesiukas69
7 years ago
From the one side, things like that will destroy confidence of Western Union around the world, many peoples uses Western Union because I don't know fastest way to send money around the world. But from other side, we should understand , that aour world are a lot of peoples who search ways how to transfer illegal money,...
From the one side, things like that will destroy confidence of Western Union around the world, many peoples uses Western Union because I don't know fastest way to send money around the world. But from other side, we should understand , that aour world are a lot of peoples who search ways how to transfer illegal money, and they always will find ways to do that. I am one of Western Union's clients, and I don't think that this scandal makes me not to use Western Union, I will trasfer money like I did it before.
Show morePlease enter your comment.
Your comment is added.
jade
7 years ago
Have you ever watched Dr Phill? He's always got some, now poor ol' lonely gal that meets some man online, on facebook or maybe one of those online dating sites. Well, to shorten up the story a bit, the lonely gal falls head over heels for this, Dr Phill calls him, a "catfish"and this gal sends her life savings, via...
Have you ever watched Dr Phill? He's always got some, now poor ol' lonely gal that meets some man online, on facebook or maybe one of those online dating sites. Well, to shorten up the story a bit, the lonely gal falls head over heels for this, Dr Phill calls him, a "catfish"and this gal sends her life savings, via WU to this guy who's in of all places Nigeria. There seems to be an endless supply of these poor gals and I'm sure WU is makin money just like off those shared in your story froggy. Just another scam. Damn, I'm so happy Bitcoin is here and I hope its here to stay!
Show morePlease enter your comment.
Your comment is added.
rferry5
7 years ago
glad i never used western union for anything geez that is the largest fine i have ever heard of for gambling fines but then again its like you said they absolutely made so much more money online from us players wow thansk rose
Please enter your comment.
Your comment is added.
zuga
7 years ago
thats one hefty fine... but then again they made so much more.
Please enter your comment.
Your comment is added.