Author: Nicola Sharp 11 January 2018
Western Union is paying $60M to resolve allegations that it failed for more than a decade to maintain a programme to deter and report suspected fraud and money laundering.
The settlement with the New York Department of Financial Services (DFS) follows the money-transfer company's agreement in January 2017 to pay $586 million to resolve similar claims by the US Department of Justice and the Federal Trade Commission.
It was alleged that, from 2004 to 2012, Western Union failed to implement and maintain effective procedures to deter use of its electronic network to facilitate fraud and money laundering.
The DFS said senior Western Union executives and managers also ignored high volumes of suspicious transactions to Chinese Western Union locations, including money transfers linked to human trafficking.
DFS Superintendent Maria Vullo said that some of Western Union's executives "put profits ahead of the company’s responsibilities to detect and prevent money laundering and fraud."
As part of the settlement, Western Union must now submit a written plan to DFS, aimed at ensuring its anti-money laundering and anti-fraud procedures are fit for purpose. It must also submit progress reports to DFS.
This problem could have been avoided – as so many could be – if executives had shown a determination to identify and tackle the problems earlier. We outlined the importance of this – and the dangers of failing to do it - a year ago.
Read our article: PREVENTING FRAUD AND MONEY LAUNDERING
Nicola is known for her fraud, civil recovery, arbitration and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.