Record Department of Justice Fine Installs Accountability at Western Union

Lee R. - January 24, 2017

The DOJ’s holding of Western union accountable should severely curtail the use of online gambling as a front.

Western Union has been wired by the Department of Justice as a result of processing certain online gambling payments.

Looking the Other Way

The US Department of Justice is collecting a $586m settlement from Western Union due to facilitating certain transactions of regional offshore online gambling operations that were fronting illegal activity.

Subpoena a Year Ago

The settlement is the product of a subpoena issued a year ago to W/U by Southern District of Florida US Attorney Wifredo A. Ferrer for records of documents containing online gambling transactions in regional jurisdictions.

Western Union Confesses

The submission of transactions in areas that included Panama, Nicaragua, the Philippines, Vietnam and Costa Rica ultimately resulted in Western Union’s admission of criminal violations of failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud earned the most severe penalty ever imposed on a financial services enterprise.

Record Penalty Avoidable  

The DOJ revealed that Western Union in Florida was actually “on notice since at least December 1997” in relation to how its money transfer system was being used for online betting. Warnings of procedures to limit these online gambling transactions beginning in 2012 “were not effective.”

Agreeing to Enforce Compliance

Western Union has further agreed to actively ensure that agents in all jurisdictions adhere to federal anti money laundering standards while preparing corrective internal action against non-compliant agents and further reporting all suspicious or illegal activity.

Dealing with the W/U Issue

The settlement is a salient reminder that Western Union is scammer’s preferred method for facilitating deception. Western Union is now being held accountable for facilitating illegal transactions for which the company collected large percentages as transaction fees, certainly a key driver of the organization’s apparent willingness to look the other way for as long as possible.

Impact on Online Gambling

The high profile settlement should severely reduce the use of online gambling services for illegal activity, rendering online gambling far safer for everybody.     

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