DOJ: Tone from the top aided massive AML violations
The U.S. Department of Justice last week announced that Western Union, a giant American MSB, has agreed to forfeit over half a billion dollars due to willful AML failtures. It has also entered into a deferred-prosecution agreement that includes an agreement to improve its AML enforcement and policies.
The DOJ press release announced that Western Union has acknowledged that it committed “criminal violations including willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud.”
Edith Ramirez, chairperson of the Federal Trade Commission, said, “Western Union owes a responsibility to American consumers to guard against fraud, but instead the company looked the other way, and its system facilitated scammers and rip-offs,” Ramirez said.
U.S. Attorney Wilfredo Ferrer singled out the tone from the top as part of a deep cultural problem that dismissed AML practices in favor of profits: “Western Union, the largest money service business in the world, has admitted to a flawed corporate culture that failed to provide a checks and balances approach to combat criminal practices,” Ferrer said. “Western Union’s failure to implement proper controls and discipline agents that violated compliances policies enabled the proliferation of illegal gambling, money laundering and fraud-related schemes.”
The DOJ details a number of the fraud and AML violations willfully committed over years by agents of Western Union, and the department notes the profit motive in the company failing to stop these agents and their high-profit behaviors obviously in violation of BSA/AML requirements. One particularly egregious example is that of actively structuring payments to human-trafficking perpetrators in China to avoid BSA reporting requirements.
“Los Angeles-defendant Wang’s company was considered to be among the largest Western Union agents in the United States as over $310 million was sent to China in a span of five years, half of which was illegally structured and transmitted using false identification,” said Deirdre Fike, an assistant director in the Los Angeles field office of the FBI. “Rather than ensuring their high volume agents were operating above-board, Western Union rewarded them without regard to the blatant lack of compliance and illegal practices taking place. This settlement should go a long way in thwarting the proceeds of illicit transactions being sent to China to fund human smuggling or drug trafficking, as well as to interrupt the ease with which scam artists flout U.S. banking regulations in schemes devised to defraud vulnerable Americans.”
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