By Dow Jones Business News,
February 24, 2014, 08:35:00 PM EDT
Western Union Co., the world's largest money-transfer company, is being investigated by the U.S. government over money
moved on its network that may have been tied to alleged fraud, according to a regulatory filing released Monday.
The Englewood, Colo.-based company said in the filing it has received multiple subpoenas since Nov. 25 from the U.S.
attorney's office for the Middle District of Pennsylvania.
The inquiries have sought documents related to complaints made by consumers to Western Union "relating to fraud-
induced money transfers since Jan. 1, 2008," as well as information about Western Union's agents, the company said.
"The government's investigation is ongoing and the company may receive additional requests for information as part of
the investigation," Western Union said in its annual report filed with the Securities and Exchange Commission. "The
company is cooperating fully with the government."
Western Union and its smaller competitor, MoneyGram International Inc. have been probed by state and federal
authorities over whether they have in place adequate controls to prevent scammers from using the companies' services to
collect money from their victims.
A representative of Western Union didn't have an immediate comment when reached Monday. A spokeswoman for MoneyGram
couldn't immediately be reached for comment.
Both companies offer money transfers, bill-payment services and other products through hundreds of thousands of agent
locations around the world, including supermarkets, pharmacies, check-cashing stores, payday lenders and bank branches.
The Federal Trade Commission has been investigating Western Union's measures to detect instances in which "consumers
are deceived into wiring money to third parties," the agency said in a November court filing. The agency had been
battling Western Union over a civil investigative demand the FTC made to the company for information about consumer
A federal judge in New York ordered the company to comply with the FTC's request in December.
Western Union said in its filing Monday that it received another civil investigative demand from the FTC on Feb. 21.
The FTC requested documents relating to consumer complaints regarding "fraud-induced money transfers' sent from or
received in the U.S. since 2004.
Representatives of the U.S. Attorney's office and FTC declined to comment.
MoneyGram previously reached a settlement with the U.S. attorney's office for the Middle District of Pennsylvania as
well as U.S. Department of Justice over transactions involving the company's agents in the U.S. and Canada. With the
settlement, MoneyGram agreed to enter into a deferred-prosecution agreement, operate under a compliance monitor and pay
$100 million to victims of fraud committed through the company's network.
Earlier this month Western Union reached an expanded agreement with Arizona over the company's controls for preventing
money laundering. The company had originally reached a $94 million settlement with the state and other states over
allegations that it didn't have sufficient controls in place.
As part of the expanded deal, which addresses allegations that the company had failed to put adequate controls in
place by July 31, 2013, Western Union agreed to remain under the supervision of a monitor through the end of 2017.
Western Union's shares were down 1.2% in after-hours trading Monday.
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