The global money service company Western Union has admitted it helped people commit wire fraud, among other criminal violations, and agreed to pay $586 million.
The settlement is the result of an investigation that found Western Union was "willfully failing to maintain an effective anti-money laundering program," the Justice Department said in a statement.
As The Two-Way has reported, the company does billions of dollars in business, dominating the market for money transfers and attracting both legal and illegal enterprises.
"As this case shows, 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.
Western Union announced that the $586 million will go to the federal government "to be used to reimburse consumers who were victims of fraud during the relevant period."
One scheme described in the announcement involved "fraudsters" contacting people in the U.S. and posing as family members in need, or promising "prizes or job opportunities" if people sent money via Western Union. The DOJ stated that, "Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds."
Had Western Union implemented a recommended anti-fraud program, according to the DOJ statement, it "could have prevented significant fraud losses to victims and would have resulted in corrective action against more than 2,000 [Western Union] agents worldwide between 2004 and 2012."
The DOJ also announced the company would "enter into agreements with the Justice Department, the Federal Trade Commission, and the U.S. Attorney's Offices for the Middle District of Pennsylvania, the Central District of California, the Eastern District of Pennsylvania and the Southern District of Florida."
Western Union said those agreements would help it "coordinate ... the resolution of other potential government claims" going forward, indicating that this settlement may not be the end of the investigation into the company.
Lastly, the settlement includes safeguards against future fraud, coordinated by the Federal Trade Commission. The FTC's order, which is part of the overall settlement announced today, "prohibits Western Union from transmitting a money transfer that it knows or reasonably should know is fraud-induced,"
The FTC also requires Western Union to:
- block money transfers sent to any person who is the subject of a fraud report;
- provide clear and conspicuous consumer fraud warnings on its paper and electronic money transfer forms;
- increase the availability of websites and telephone numbers that enable consumers to file fraud complaints;
- refund a fraudulently induced money transfer if the company failed to comply with its anti-fraud procedures in connection with that transaction.
The Justice Department has asked anyone who believes they were the victim of a fraudulent Western Union transaction to report it to the DOJ's remission department.