Western Union to Pay $3M Settlement

Friday, September 01, 2006

By PAUL DAVENPORT, Associated Press Writer

PHOENIX — Western Union has reached a $3 million settlement with Arizona financial regulators on allegations that the money transfer company failed to comply with state reporting laws intended to help combat money laundering and illegal immigration.

In an agreement with the state Department of Financial Institutions, Englewood, Colo.-based Western Union Financial Services Inc. agreed to end or suspend its relationship with a total of 14 outlets that failed to comply with state laws on reporting and documenting money transfers.

Western Union agreed to pay a $1.6 million civil penalty, $1 million to a state task force on fraudulent identification and $400,000 to the state Department of Transportation.

Department Superintendent Felecia Rotellini said Western Union also agreed to implement an enhanced compliance program and to meet with department officials regularly to discuss compliance and supervision of its agent outlets.

The agreement was signed earlier this month and disclosed late Thursday.

Concerned about illegal immigration and other smuggling activities, Arizona officials in recent years have stepped up their scrutiny of financial institutions.

In 2004, a new state law made it easier for state prosecutors to seize money paid to migrant smugglers through money transfers.

Rotellini said the department, working with attorney general's investigators, found that Western Union and its agents collected hard-to-read or otherwise unusable information on the identity of senders or receivers of money transfers at some locations.

Also, Western Union's record-keeping was lax and the company did not properly supervise its agents as required by the state.

"We will have a zero tolerance for those transmitters who are facilitating illegal immigration by failing to comply with the GTO and Arizona law,"Rotellini said in a statement.

Christina A. Gold, Western Union's president and chief executive officer, said in the agreement that the company was not admitting any guilt or fault but waived the right to further contest the state's allegations.

Western Union was committed to complying with Arizona's laws against money laundering, she said.

Western Union shut down its telegraph service earlier tis year.


On the Net:

Western Union:http://www.westerunion.com

Department of Financial Institutions:http://azdfi.gov

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.