Western Union settles lawsuit with Arizona - East Valley Tribune: Arizona

Western Union settles lawsuit with Arizona

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Posted: Wednesday, February 10, 2010 8:18 pm | Updated: 3:37 am, Sat Oct 8, 2011.

A major money-wiring corporation will pay Arizona millions of dollars to end a lawsuit filed against it by the state.

Western Union will pay $50 million to a nonprofit organization, and it will then be available in grants to law enforcement agencies in the four Mexican border states to combat human trafficking, drug smuggling and money laundering. The company also will pay $21 million to Arizona to cover the costs already incurred in its investigation of whether Western Union or its agents were engaged in money laundering.

On top of that, the company said it will spend $19 million to enhance its own money-laundering prevention efforts. And it will fund a special monitor to oversee those efforts at a cost of $4 million.

The deal, formally announced Thursday, caps years of efforts by the Arizona Attorney General’s Office to get the company to help it tie up funds being wired to Mexico.

Prosecutors sought court orders to “dam” all wire transfers meeting certain criteria. It would then be up to the intended recipient to show that the funding is for a legal reason.

But Western Union balked when Attorney General Terry Goddard tried to expand that to cover funds wired from other states into Mexico. Goddard argued these were linked to criminal activity taking place in Arizona, including smuggling humans and drugs.

The Arizona Supreme Court eventually sided with Western Union.

Western Union, in agreeing to the settlement, did not admit that it had done anything wrong. David Schlapbach, the executive vice president and general counsel, said he believes the company’s efforts to fight money laundering is “the best in the industry.”

“We are committed to working cooperatively with Arizona to further enhance our program to deal with the unique problems associated with criminal activity along the Southwest border,” he said in a prepared statement.

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