$586 million AML penalty for Western Union

Following a year-long multi-federal agency investigation and much argument, money services provider Western Union in Florida has reached a $596 million settlement with the local US Attorney’s Office in respect of suspected online gambling and other questionable transactions using its services to move payments to several countries, including Vietnam, Panama, Costa Rica, the Philippines and Nicaragua.

Announcing the money-laundering based settlement this week, the US Attorney for Southern Florida noted that the settlement represented the biggest penalty yet imposed on a money services business, and that Western Union had acknowledged that it had wilfully failed to maintain an effective anti-money laundering (AML) program.

The announcement revealed that Western Union had been warned as far back as 1997 about illegal sports betting gamblers in Florida using its services to make monetary transactions with nations outside the United States, and that as recently as 2012 the company was aware that its systems to restrict such transactions were ineffective.

The settlement agreement includes a commitment from Western Union to improve its systems and comply more effectively with US laws, training and disciplining staff who do not meet the required standards, and ensuring that suspicious transactions are reported.

The penalty was also in respect of transactions involving an international fraud scam unrelated to online gambling.