Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 1 of 65 

IN THE UNITED STATES DISTRICT COURT
 

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
 

)
 

FEDERAL TRADE COMMISSION, )
 

)
 

Plaintiff, )
 

) Civil Action No. 

v. ) 

) 

THE WESTERN UNION COMPANY, ) 

a corporation, also doing business as ) 

Western Union Financial Services, Inc., ) 

and through other subsidiaries and affiliates, ) 

) 

Defendant. ) 

) 

COMPLAINT FOR PERMANENT INJUNCTIVE
 

AND OTHER EQUITABLE RELIEF
 

Plaintiff, the Federal Trade Commission (“FTC”), for its complaint alleges: 

1. The FTC brings this action under Section 13(b) of the Federal Trade 

Commission Act (“FTC Act”), 15 U.S.C. § 53(b), and the Telemarketing and 

Consumer Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. 

§§ 6101-6108, to obtain permanent injunctive relief, rescission or reformation of 

contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, 

and other equitable relief for Defendant’s acts or practices in violation of Section 

5(a) of the FTC Act, 15 U.S.C. § 45(a), and in violation of the FTC’s Trade 

Regulation Rule entitled “Telemarketing Sales Rule” (“TSR”), 16 C.F.R. Part 310, 

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in connection with Defendant’s failure to take timely, appropriate, and effective 

measures to mitigate fraud in the processing of money transfers sent by consumers. 

JURISDICTION AND VENUE 

2. This Court has subject matter jurisdiction pursuant to 28 U.S.C. 

§§ 1331, 1337(a), and 1345, and 15 U.S.C. §§ 45(a), 53(b), 6102(c), and 6105(b). 

3. Venue is proper in this district under 28 U.S.C. § 1391(b)(2), and 

(c)(2), and 15 U.S.C. § 53(b). 

PLAINTIFF 

4. The FTC is an independent agency of the United States Government 

created by statute. 15 U.S.C. §§ 41-58. The FTC enforces Section 5(a) of the FTC 

Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or 

affecting commerce. The FTC also enforces the Telemarketing Act, 15 U.S.C. 

§§ 6101-6108. Pursuant to the Telemarketing Act, the FTC promulgated and 

enforces the TSR, 16 C.F.R. Part 310, which prohibits deceptive and abusive 

telemarketing acts or practices. 

5. The FTC is authorized to initiate federal district court proceedings, by 

its own attorneys, to enjoin violations of the FTC Act and the TSR, and to secure 

such equitable relief as may be appropriate in each case, including rescission or 

reformation of contracts, restitution, the refund of monies paid, and the 

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disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 56(a)(2)(A)-(B), 6102(c), 

and 6105(b). 

DEFENDANT 

6. Defendant The Western Union Company (“Western Union”), also 

doing business as Western Union Financial Services, Inc., and through other 

subsidiaries and affiliates, is a Delaware corporation with its principal place of 

business at 12500 East Belford Avenue, Englewood, Colorado 80112. Western 

Union transacts or has transacted business in this district, as well as throughout the 

United States and the world. 

7. Western Union operates, and enters into contracts for the provision of, 

money transfer services worldwide, through numerous subsidiaries and affiliates, 

including, but not limited to, Western Union Financial Services, Inc., Western 

Union Payment Services Ireland Limited (“WUPSIL”), Western Union Payment 

Services Network EU/EEA Limited, Western Union Financial Services (Canada) 

Inc., Western Union Network Ireland Ltd., Western Union Network Canada 

Company, Western Union Network France SAS, Western Union Network Belgium 

Sprl., Western Union Payment Services UK Ltd., Western Union International 

Bank GmbH, American Rapid Corporation, Grupo Dinamico Empresarial, S.A. de 

C.V., Servicio Integral de Envios, S.A. de C.V., and Operaciones Internacionales 

OV, S.A. DE C.V. 

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COMMERCE
 

8. At all times material to this Complaint, Defendant has maintained a 

substantial course of trade in or affecting commerce, as “commerce” is defined in 

Section 4 of the FTC Act, 15 U.S.C. § 44. 

BACKGROUND 

9. For many years, Western Union’s money transfer system has been 

used by fraudsters around the world to obtain money from their victims. Discrete 

subsets of Western Union agents in various countries have largely been responsible 

for processing the payments, and many Western Union agents have played active 

and important roles in facilitating those frauds. As described more fully below, 

although Western Union has long been aware and has received many warnings that 

its system is being used for frauds, for many years it has failed to implement 

adequate and effective policies and procedures to detect and prevent fraud and to 

take prompt action to effectively address problematic agent locations. In some 

instances, Western Union’s agent locations have been, or likely been, complicit in 

the frauds, and have engaged in suspicious activities indicative of complicity in 

paying out fraud-induced money transfers. In other cases, Western Union’s agent 

locations have facilitated the scams by paying out fraud-induced money transfers 

in violation of Western Union’s anti-fraud and/or Anti-Money Laundering 

(“AML”) policies and procedures that impact consumer fraud. Western Union has 

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known about the problem and has identified many of the agents providing 

substantial assistance or support to the frauds. Although as a result of the FTC’s 

investigation, Western Union has improved aspects of its anti-fraud program since 

2012, Western Union still has failed in many cases to promptly suspend and 

terminate agent locations facilitating fraud. Instead, Western Union has continued 

to profit from the activities of these agents. 

Western Union’s Money Transfer System 

10. Western Union offers money transfer services to consumers 

worldwide through a network of approximately 515,000 agent locations in more 

than 200 countries and territories. Western Union is the largest money transfer 

company in the United States and worldwide. More than 50,000 of its 515,000 

agent locations are in the United States. In addition to offering money transfer 

services under the Western Union brand, Western Union owns and operates 

Orlanda Valuta (“OV”), which provides money transfer services primarily to 

Mexico, and Vigo, which provides money transfer services primarily to Latin 

America and the Caribbean. Consumers in the United States can send money 

transfers through OV and Vigo from thousands of Western Union agent locations. 

According to Western Union, “[e]very day, millions of consumers rely on Western 

Union Money Transfer® service to send money to loved ones near and far.” 

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11. Consumers wishing to send funds using Western Union’s money 

transfer system may initiate a transaction in person, online, or over the telephone. 

Western Union claims that its locations are “around every corner” with 

“knowledgeable agents,” and that its money transfer services are “fast, convenient, 

and safe.” Although the amount that may be sent online or over the telephone is 

sometimes restricted, there typically are no restrictions on the amount of money 

that a consumer can send in person from agent locations. Certain countries, 

however, limit the amount of money that can be picked up from agent locations. 

For in-person money transfers, consumers must pay with cash or a bank-issued 

debit card. For online or telephone transfers, consumers typically must pay with a 

credit or debit card. Over 90% of money transfers sent through Western Union are 

initiated in person at Western Union’s agent locations. 

12. When initiating a money transfer at one of Western Union’s agent 

locations, the sender must complete a “send form,” which typically requires the 

sender’s name, address and telephone number, and the name of the recipient and 

the city, state/province, and country to which the money transfer is being sent. 

Consumers initiating money transfers at Western Union’s agent locations may 

select from Western Union’s “Money in Minutes” or “Next Day” services, where 

available. For money transfers above a certain amount, such as $1,000, the sender 

must present identification (“ID”) and the agent locations must record in Western 

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Union’s system the sender’s ID information. Over time, in some countries, 

Western Union has lowered the amount that triggers the ID requirement. 

13. In order to send a money transfer, consumers must pay a fee to 

Western Union. This fee varies depending upon the method of the money transfer, 

the destination, the amount, the method of payment, and how quickly the money 

transfer is to be completed. The money transfer fee for Western Union’s “Money 

in Minutes” service is higher than its “Next Day” service. According to Western 

Union’s website, to send a $1,000 “Money in Minutes” money transfer from the 

United States to the United Kingdom (“UK”), consumers must pay an $81 transfer 

fee if paying by credit or debit card, or $58 if paying in cash. For international 

money transfers, in addition to charging consumers a money transfer fee, Western 

Union also makes money from the foreign currency exchange. Upon initiating a 

money transfer, consumers are provided with a unique tracking number called a 

Money Transfer Control Number (“MTCN”). 

14. Prior to paying out funds at its agent locations, Western Union’s 

practice is generally to require the recipient to provide the MTCN, to complete a 

“receive form” with the recipient’s name, address and telephone number, and to 

present ID. For many years, for money transfers of less than $1,000, even though 

recipients may have been required to present ID, Western Union agent locations 

worldwide have not been required to record in Western Union’s system the 

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recipient’s ID information. When the recipient does not have an ID and the money 

transfer is less than $1,000, the sender sometimes has the option of using a “Test 

Question and Answer.” According to Western Union, this option “is designed for 

emergency situations where the receiver doesn’t have proper identification” 

because his or her wallet was stolen. 

15. Regardless of the method used to initiate the money transfer, all 

Western Union money transfers flow through the same global money transfer 

system controlled by Western Union. This system coordinates and makes funds 

available to complete the transactions. Agents must have active accounts with 

Western Union to send and receive money transfers using Western Union’s money 

transfer system. 

16. Once Western Union’s agent locations have paid out the funds, 

Western Union’s policy typically is that the sender cannot obtain a refund from 

Western Union of either the amount transferred or the money transfer fee, even if 

the sender was a victim of fraud or the money transfer was paid out to someone 

other than the intended recipient. The policy even applies if the Western Union 

agent location was complicit in the fraud, engaged in suspicious activity, or failed 

to follow Western Union’s policies and procedures when processing the money 

transfer (e.g., by failing to record the recipient’s ID or other required information). 

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Use of Western Union’s Money Transfer
 

System to Facilitate Fraud and Harm Consumers
 

17. Over the years, money transfers have increasingly become the 

payment method of choice for scams that prey on consumers around the world. 

Fraudulent telemarketers and con artists prefer to use money transfers to facilitate 

their scams because, among other reasons, they can pick up money transferred 

within minutes at multiple locations and, oftentimes, the perpetrators are afforded 

anonymity because the payments are untraceable. For example, money transfers 

can be picked up at any location within a particular state or country; some money 

transfers can be picked up without presenting or having to record an ID; fake 

names, addresses, and IDs sometimes can be used; and Western Union’s own agent 

locations sometimes fail to follow the company’s policies and procedures in paying 

out money transfers, and in other instances, are complicit in the frauds. Therefore, 

it is often difficult for consumers and law enforcement to identify and locate the 

recipients of fraud-induced money transfers. 

18. Western Union maintains a database of complaints it receives about 

fraud-induced money transfers. Based on information in that database, between 

January 1, 2004 and August 29, 2015, Western Union received at least 550,928 

complaints about fraud-induced money transfers, totaling at least $632,721,044. 

Over 80% of the complaints in the database were from U.S. consumers. The 

average individual consumer fraud loss reflected in that database was 

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approximately $1,148. That is more than three times the amount of Western 

Union’s average money transfer for the years 2010 through 2014—approximately 

$346—and more than seven times the amount of Western Union’s median money 

transfer for the same period—approximately $162. 

19. As explained more fully below, the complaints in Western Union’s 

database represent only a small percentage of the actual fraud perpetrated through 

Western Union’s money transfer system because most victimized consumers do 

not complain directly to Western Union. In addition, Western Union also does not 

include information in its database about all of the complaints it receives. 

Therefore, since at least January 1, 2004, it is likely that Western Union’s money 

transfer system has been used to send billions of dollars in fraud-induced payments 

to telemarketers and con artists worldwide. 

Western Union’s Contractual Authority
 

to Oversee and Take Action Against its Agents
 

20. Western Union requires that its agents, which are also referred to as 

authorized delegates or representatives, sign written agreements in order to offer 

and provide payment services through Western Union’s money transfer system. 

The initial terms of the written agreements typically are five years, after which 

they are renewable for additional periods of time. Western Union pays its agents 

in the United States an agreed-upon commission, performance bonus, and volume 

bonus for offering and processing money transfer services on Western Union’s 

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behalf, while it pays its international agents an agreed-upon base compensation for 

the consumer fee received, and a percentage of the foreign exchange profits, on 

each transaction. 

21. Western Union’s written agreements with its agents typically require 

the agents to comply with all applicable laws, including laws for detecting and 

preventing money laundering. These agreements also provide that Western Union 

has the right to immediately suspend or terminate its agents, including any agent 

location. Western Union’s agents are required to keep records for all transactions, 

provide them to Western Union upon request, and cooperate with any audit or 

review by Western Union. The agreements also provide Western Union with the 

right to inspect and audit its agents’ books and records to monitor the agents’ 

compliance with the agreement, applicable law, and Western Union’s policies. 

22. Western Union’s agents, which are also sometimes referred to as 

“network agents,” “master agents,” or “super-agents,” in many instances provide 

Western Union’s money transfer services through their own networks or locations, 

or, in countries outside of the United States and Canada, also through subrepresentatives, which Western Union commonly refers to as “subagents” 

(hereinafter collectively referred to as “agents” or “subagents”). Western Union 

typically is not involved in enrolling its agents’ subagents and does not have a 

direct contractual relationship with them. Western Union’s agreements with its 

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agents, however, provide it with the authority to suspend and terminate its agents’ 

subagents, as well as any location at which its money transfer services are offered. 

Western Union’s Programs, Policies, and Procedures 

23. Western Union has two primary programs relating to the detection and 

prevention of consumer fraud and the installation and oversight of agents: its antifraud program, which sometimes is referred to as its consumer protection program, 

and its AML program. As implemented by Western Union, for many years these 

interrelated programs failed to adequately and effectively detect and prevent 

consumer frauds employing Western Union’s money transfer system. Western 

Union’s design and implementation of these programs for addressing fraud, as well 

as its oversight of its global money transfer system, occur primarily within the 

United States. 

24. For many years, Western Union has failed to implement a 

comprehensive and effective anti-fraud program. In or around April 2003, after 

Western Union became aware that some of its agents had been suspected of being 

involved in paying out fraud-induced money transfers to telemarketers, Western 

Union’s Security Department developed a Standard Operating Procedure (“SOP”) 

for reviewing and suspending agents for consumer fraud. The SOP outlines a 

process and guidelines for identifying agents for review and suspension based on 

consumer fraud complaints, as well as a process for reinstating or terminating 

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agents. The SOP was revised at various times, most recently in or around 

September 2010. Beginning in or around January 2006, the SOP included 

procedures that applied to agents outside of the United States and Canada. 

However, to the extent that Western Union suspended and/or terminated agents 

pursuant to the SOP, for many years the suspensions and/or terminations were 

typically limited to agents in the United States and Canada. 

25. In a written report in January 2011, Western Union represented it was 

making “enhancements” to its consumer protection program that were to include 

improvements to the company’s program for conducting due diligence and training 

of its agents, monitoring agent activity, and taking disciplinary action, including 

suspension and termination, against agents. Subsequently, in a written report about 

its anti-fraud program dated September 14, 2012, Western Union claimed it had 

implemented “a comprehensive anti-fraud program” that included agent training, 

agent monitoring, and “[p]rompt action, including suspensions and terminations, 

against Agents when the Company identifies fraudulent activity.” Western Union 

recognized in this report that its “first line of defense against fraud is to engage 

Agents who will fully comply with the Anti-Fraud program and policies and 

procedures.” 

26. As a result of the FTC’s investigation, Western Union has made 

progress since 2012 in identifying and blocking potentially fraudulent transactions 

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and in otherwise protecting consumers from fraud. Despite that, Western Union 

continued to fail, in certain cases, to promptly suspend and terminate certain highfraud agent locations, including locations that appeared to be complicit in paying 

out fraud-induced money transfers or repeatedly failed to comply with Western 

Union’s anti-fraud and AML programs, policies, and procedures. 

27. In addition to its anti-fraud program, Western Union is required by the 

Bank Secrecy Act (“BSA”) to have an effective AML program to guard against 

money laundering, including, but not limited to, guarding against the flow of illicit 

funds, such as funds derived from fraud. As part of its AML program, Western 

Union has developed Know Your Agent guidelines and policies, and policies and 

procedures for monitoring transaction, customer, and agent activity for risks, 

including suspicious activity and agent complicity. Western Union’s AML 

program relies heavily upon its agents to have their own AML programs. In many 

cases, Western Union or its agents have failed to implement effective AML 

policies and procedures pertaining to consumer fraud, thereby making Western 

Union’s money transfer system more vulnerable to consumer fraud. 

28. As described below, Western Union has failed to: promptly 

investigate, suspend, and terminate potentially complicit agents and subagents, or 

agents and subagents that have failed to comply with Western Union’s anti-fraud 

and/or AML policies and procedures that impact consumer fraud; conduct 

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adequate due diligence on prospective and existing agents and subagents; 

effectively train, monitor, and review agents, subagents, and front line associates, 

who are responsible at the point of sale for processing money transfers at Western 

Union’s agent locations (“FLAs”), with respect to consumer fraud; adequately 

collect, record, and report consumer fraud involving its money transfer system; and 

adopt other reasonable measures to prevent fraud-induced money transfers. In 

some cases Western Union has failed to adopt adequate and effective policies and 

procedures to detect and prevent fraud-induced money transfers, while in other 

cases it has failed to adhere to its own anti-fraud and AML programs, policies, and 

procedures. 

WESTERN UNION’S MONEY TRANSFER 

SYSTEM HAS REGULARLY BEEN USED FOR FRAUD
 

29. Perpetrators of many different types of mass marketing and imposter 

scams have relied on money transfer systems, including Western Union’s system, 

as a means of fraudulently obtaining money from consumers around the world. All 

of these scams operate deceptively in violation of Section 5 of the FTC Act, and 

many of the scams also involve fraudulent telemarketing in violation of the TSR. 

30. In these scams, consumers often are instructed over the telephone or 

by email to send money transfers through Western Union’s money transfer system. 

The telemarketers and con artists use false or misleading statements to induce 

consumers either to pay for purported goods or services, or to make payments as a 

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result of purported circumstances, such as emergencies, that do not exist. 

Consumers’ fraud-induced payments through Western Union’s system often 

exceed $1,000 per transaction. The types of scams referenced in Western Union’s 

own complaint database include, but are not limited to: 

a. Online or Internet purchases (see FTC Consumer Alert on 

Online purchases, available at http://www.ftc.gov/news-events/pressreleases/2006/07/ftc-advises-consumers-not-use-wire-transfers-onlinepurchases): According to Western Union’s complaint database, 

between January 1, 2004 and August 29, 2015, the company received 

at least 146,909 complaints about this type of scam totaling at least 

$187,877,003 in losses; 

b. Lottery or prize scams (see 

http://www.consumer.ftc.gov/articles/0086-international-lotteryscams): According to Western Union’s complaint database, between 

January 1, 2004 and August 29, 2015, the company received at least 

75,543 complaints about this type of scam totaling at least 

$86,138,055 in losses; 

c. Emergency scams, including grandparent scams (see 

http://www.consumer.ftc.gov/articles/0204-family-emergency-scams): 

According to Western Union’s complaint database, between January 

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1, 2004 and August 29, 2015, the company received at least 41,897 

complaints about this type of scam totaling at least $73,807,353 in 

losses; 

d. Advance-fee loan scams (see 

http://www.consumer.ftc.gov/articles/0078-advance-fee-loans): 

According to Western Union’s complaint database, between January 

1, 2004 and August 29, 2015, the company received at least 71,296 

complaints about this type of scam totaling at least $43,617,107 in 

losses; and 

e. Online dating or romance scams (see http://www.ftc.gov/newsevents/press-releases/2010/11/ftc-warns-consumers-about-onlinedating-scams): According to Western Union’s complaint database, 

between January 1, 2004 and August 29, 2015, the company received 

at least 44,588 complaints about this type of scam totaling at least 

$40,980,482 in losses. 

31. When consumers send the money transfers from one of Western 

Union’s agent locations, the perpetrators of the scams described above, or those 

acting on their behalf, frequently collect the funds from one of Western Union’s 

corrupt or complicit agent locations or from agent locations that violate Western 

Union’s anti-fraud and/or AML policies and procedures, such as by failing to 

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properly collect and record all of recipients’ IDs or biological information, or by 

recording obviously false information. 

A DISCRETE SUBSET OF WESTERN UNION 

AGENTS WORLDWIDE HAS PAID OUT THE 

MAJORITY OF FRAUD-INDUCED MONEY TRANSFERS 

32. Western Union’s records show that the majority of fraud-induced 

money transfers have been paid out by a discrete, and easily identifiable, subset of 

Western Union’s agents and subagents in various countries around the world. The 

vast majority of Western Union agent locations worldwide do not pay out 

transactions associated with a single fraud complaint to Western Union. In fact, 

only a small and discrete subset of agents and subagents worldwide pay out money 

transfers relating to any fraud complaints. An even more easily identifiable and 

distinct subset of agents and subagents have been the subject of five or more fraud 

complaints in a given year, but this group of Western Union agents has been 

responsible for paying out most of the reported fraud losses. For example: 

a. In 2012, 137 agent locations in Mexico (out of an average of 

17,710 locations operating in that country each month of the year) had 

five or more fraud complaints, and these 137 agents were responsible 

for paying out approximately $3.2 million, amounting to over 80% of 

the total reported fraud for Mexico that year. Similarly, in 2013, 140 

agent locations in Mexico (out of an average of 9,002 locations) paid 

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out approximately $2.1 million, amounting to over 75% of the total 

reported fraud in Mexico, and in 2014, 108 agent locations (out of an 

average of 8,345 locations) paid out approximately $1.5 million, 

amounting to over 76% of the total reported fraud. 

b. In 2012, 188 agent locations in Nigeria (out of an average of 

5,036 locations in that country) had five or more fraud complaints, 

and these 188 agents paid out approximately $1.9 million, amounting 

to over 77% of the total reported fraud for Nigeria that year. In 2013, 

235 agent locations in Nigeria (out of an average of 5,034 locations) 

paid out approximately $1.5 million, amounting to over 71% of the 

total reported fraud in Nigeria, and in 2014, 269 agent locations (out 

of an average of 5,208 locations) paid out approximately $2.6 million, 

amounting to over 84% of the total reported fraud. 

33. Western Union’s internal reports and memoranda show that the 

company was aware that discrete and easily identifiable subsets of agents and 

subagents in various locations were responsible for paying out the majority of 

fraud-induced money transfers. For example, a Financial Intelligence Report titled 

“G.A.P. – United Kingdom” stated that a review of fraud complaints in late 2009 

revealed that one network of agents “accounted for more consumer Fraud 

Complaints than any other Agent Network in the United Kingdom” and that an 

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analysis of data in the first quarter of 2010 for nineteen agents demonstrated 

“indicators of Agent complicity.” A January 19, 2012 memorandum regarding 

“GMI Fraud Monitoring and Intelligence” stated that in Spain “when looking at a 

list of 30 Agents that were investigated in 2010 it was determined that the amount 

of potential fraud identified by GMI surpassed the total number of formal fraud 

complaints and amounts for the entire country in 2010, demonstrating the true 

levels of fraud related risk present in Spain.” (Emphasis in original.) In March 

2012, a senior compliance analyst found that from December 1, 2011 to February 

24, 2012, “nearly 85% of all emergency fund fraud complaints filed with Western 

Union” involved money transfers paid out by one master agent in Mexico, Elektra, 

through 94 of its locations. 

MANY WESTERN UNION AGENTS HAVE BEEN
 

ACTIVE OR COMPLICIT IN THE UNDERLYING SCAMS
 

34. Many Western Union agent locations that have received fraudinduced money transfers from consumers and paid out such transfers to the 

fraudulent telemarketers and con artists have been complicit in the underlying 

scams. In some cases, the sellers, telemarketers, or imposters who have operated 

the scams have been Western Union’s own agents or subagents. 

35. At least 146 of Western Union’s agents and subagents around the 

world, as well as at least two FLAs, have been charged with acting collusively in 

the frauds employing Western Union’s money transfer system. Of the 146 agents, 

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39 agents in the United States and Canada have been charged in the United States 

with defrauding consumers through various mass marketing and/or telemarketing 

schemes including fraudulent sweepstakes, advance fee loans, business 

opportunities (including secret shopper or work-at-home scams), emergency or 

person-in-need schemes, and/or Internet purchase offers. The charges against 

these 39 agents have included conspiracy to commit mail fraud, wire fraud and/or 

money laundering, and most of the agents have already pleaded guilty or been 

convicted of the charges. These 39 agents paid out over $5.2 million in money 

transfers that were reported to Western Union as having been induced by fraud. As 

explained below, however, actual consumer losses far exceed the reported losses. 

These matters include: 

Case Western Union Agents 

United States v. Agbasi, et al., 

No. 07-CR-504 (M.D. Pa.) 

Stanley Akubueze and Christopher Ozurus (d/b/a 

Afro Spot Restaurant) 

Philip Utomi (d/b/a Swift Cash Centre) 

United States v. Bellini, et al., 

No. 07-CR-1402 (C.D. Cal.) 

Vijayakumar Ramakrishnan (d/b/a Cafe 

Chambly) 

John Felix Alexander (d/b/a Imudia Int) 

United States v. Ayodele, et 

al., No. 10-CR-058 (M.D. 

Pa.) 

Soji Ayodele (d/b/a Total Communications 

Centre) 

Mohsen Golab (d/b/a Golden Century) 

Christian Kevin (d/b/a C K Business Service) 

United States v. Akinola, et 

al., 

No. 10-CR-300 (S.D. Tex.) 

Jonathan Akinola (d/b/a Postal & Wireless 

Outlet) 

United States v. Groysman, 

No. 10-CR-326 (M.D. Pa.) 

Bella Groysman (d/b/a Professional Medical 

Supplies) 

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United States v. DobrovinskyKaz, No. 10-CR-327 (M.D. 

Pa.) 

Tatyana Dobrovinsky-Kaz (d/b/a Professional 

Medical Supplies) 

United States v. Abbey, 

No. 10-CR-344 (M.D. Pa.) 

Festus G. Abbey (d/b/a Abbey’s One Stop and 

Abbey Multi Service) 

United States v. Nwuda, 

No. 10-CR-508 (C.D. Cal.) 

Nmandi Nick Nwuda (d/b/a CKane Check 

Cashing & Postal) 

United States v. Idemudia, 

No. 11-CR-001 (M.D. Pa.) 

Eugene Idemudia (d/b/a IV Beauty Supply and 

RM & E) 

United States v. Agho, et al., 

No. 11-CR-113 (M.D. Pa.) 

Betty Agho (d/b/a Star Multiservice) 

Itohan Agho-Allen (d/b/a Miracle Multi Link) 

Prince Edosa (d/b/a Gosa Multi Services and A & 

M Communications) 

Kennedy Onaiwu (d/b/a Kenizo Enterprise) 

Ikejiani Okoloubu (d/b/a First Cone and 

Depanneur Ice) 

Susan Osagiede (d/b/a A & M Communications) 

Elvis Uadiele (d/b/a Diale Investment) 

Nekpen Omorodion (d/b/a Global Multiservices) 

United States v. Adigun, et 

al., 

No. 11-CR-151 (M.D. Pa.) 

Olufemi Adigun (d/b/a FAB) 

United States v. Louissaint, 

No. 11-CR-201 (M.D. Pa.) 

Emmanuel Louissaint (d/b/a Hudson Food 

Market II) 

United States v. Brown, 

No. 12-CR-001 (M.D. Pa.) 

Blessing Brown (d/b/a O & B Enterprise Inc) 

United States v. Mayele, 

No. 12-CR-210 (C.D. Cal.) 

Prince Martin Mayele (d/b/a Du Monde Digital 

Trades) 

United States v. Mgbolu, et 

al., No. 12-CR-232 (M.D. 

Pa.) 

Alex Mgbolu (d/b/a FA CAM Assoc. & Financial 

Corp) 

Chima Nneji (d/b/a Advanced Computer Service 

and Hallmark Business Services) 

William Nneji (d/b/a Hallmark Business 

Services) 

22
 
 

 

 

 

 

 

Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 23 of 65 

United States v. Idisi-Arah, et 

al., No. 12-CR-311 (M.D. 

Pa.) 

Lucas Obi (d/b/a Canada Cash Express) 

United States v. Anyika, et al., 

No. 14-CR-006 (M.D. Pa.) 

Ejike Egwuekwe (d/b/a Merrick Multiple 

Services and Lincoln One Stop Place) 

Franklyn Idehen (d/b/a Treasure Links and 

Cherrish Communication Center) 

Nnamdi Ihezuo (d/b/a Net Global & Multi 

Services) 

Cyprian Osita Ngbadi (d/b/a Rockaway Business 

Center) 

State of Texas v. Mbaka, 

No. 09-DCR-52310A (Tex. 

Dist. Ct. Ft. Bend County) 

Boniface Ifeanyi Mbaka (d/b/a BIM Services) 

36. Criminal law enforcers in other countries also have taken action 

against at least an additional 107 Western Union agents and two FLAs, including 

in the following instances: 

a. Sentencing in the UK (in or around November 2012) of an 

individual, Peter Oyewor, who operated at least two Western Union 

agent locations (d/b/a Benson Logistics and Abmec Logistic) and was 

found guilty of money laundering over £1.34 million in proceeds from 

consumer frauds; 

b. Arrests made by the Nigerian Special Fraud Unit (in or around 

June 2013) of two FLAs at a Western Union location (Skye Bank 

PLC) for aiding Internet fraudsters; and 

c. Arrests made by the Spanish police (in or around July 2014) of 

105 Western Union agents in Spain, who were involved in a massive 

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international scam involving Nigerian frauds that primarily targeted 

U.S., Canadian, and German consumers, and caused at least €11.5 

million (approximately $15.5 million) in consumer injury. 

WESTERN UNION HAS BEEN AWARE THAT ITS SYSTEM
 

HAS BEEN USED FOR FRAUD-INDUCED MONEY TRANSFERS
 

37. Since at least January 2004, Western Union has been aware that its 

system has regularly been used for fraud and that it has an identifiable subset of 

agents and subagents with high levels of fraud complaints. It also has been aware 

that many of its agent locations with high-fraud payouts have: (1) violated Western 

Union’s anti-fraud and/or AML policies and procedures; (2) engaged in suspicious 

activities; and/or (3) been complicit, or likely complicit, in the frauds. Western 

Union’s awareness of the consumer fraud problem is demonstrated by, among 

other things, the hundreds of thousands of complaints it has received from 

consumers, its own internal records and reports, and years of warnings from 

government agencies throughout the world. 

Defrauded Consumers Have Regularly Complained to Western Union 

38. When consumers realize that they have been defrauded, they 

sometimes contact Western Union to report the fraud, often using a toll-free 

number made available by Western Union to consumers in certain countries, 

including the United States. In some cases, consumers also have filed lawsuits 

against Western Union due to the company’s role in processing the fraud-induced 

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money transfers. In addition, as described above, between approximately January 

1, 2004 and August 29, 2015, Western Union’s database shows at least 550,928 

complaints it received about at least $632,721,044 in fraud-induced money 

transfers. Western Union also has other records reflecting additional complaints it 

received, which were not recorded in the database, including a spreadsheet of at 

least 8,497 complaints Western Union received in 2005 regarding fraud-induced 

money transfers, which totaled at least $14,478,365. 

39. The complaints reported to Western Union, however, represent only a 

fraction of the consumer frauds employing Western Union’s money transfer 

system for at least three reasons: 

a. For years, Western Union has failed to provide victims in many 

countries worldwide with access to a fraud hotline, or a toll-free 

telephone number for victims to call to report fraud, which is the most 

convenient mechanism for many victims to promptly report fraud; 

b. The majority of consumer victims do not complain directly to 

Western Union. Western Union’s own internal reports recognize that 

only a small percentage of consumers complain about fraud and that 

the volume of fraud-induced money transfers is much higher than that 

reported to the company. For example, Western Union has 

recognized in several reports that the actual amount of fraud-induced 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 26 of 65 

money transfers associated with agent locations was in some cases 

over five times higher than the reported complaint figures; and 

c. As further explained below, Western Union’s database of fraud 

complaints is incomplete because Western Union has failed to log in 

its database all of the complaints and reports about fraud it has 

received, as well as all of the fraud-induced money transfers related to 

the complaints. 

Western Union’s Internal Reports and Records Demonstrate
 

Awareness of Consumer Fraud by Agents in Various Countries Worldwide
 

40. Since at least 2005, Western Union has conducted reviews and 

investigations, and generated indices and reports, related to consumer fraud 

involving its money transfer system. Information contained in Western Union’s 

internal reports, communications, and other records demonstrates that the company 

has been aware of high levels of consumer fraud involving particular countries and 

agents, including network agents Western Union itself owns. These records 

demonstrate serious problems and suspicious activities by particular Western 

Union agents and subagents, including, but not limited to: (a) high numbers and 

patterns of complaints; (b) spikes in the number of money transfers received; (c) 

money transfer amounts that far exceed the average transfer amount; (d) data 

integrity issues (issues relating to the recording of ID numbers, dates of birth, or 

other information about recipients); (e) payouts within minutes after the money 

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transfers were sent; (f) flipping (shortly after receiving funds, a large portion of the 

money is sent to another recipient); (g) surfing (suspicious look-ups of money 

transfers in Western Union’s system by FLAs); and (h) substantial sends to highrisk countries known for fraud. 

41. According to information contained in Western Union’s complaint 

database, the United States has been the top country for fraud payouts since at least 

2004 and has generated over three times the number of complaints as the next 

highest country. In fact, over $128.2 million in reported fraud has been paid out in 

the United States since 2010, and Western Union has received more than 34,000 

fraud complaints about transactions totaling over $21.2 million since 2014. 

Certain agent locations in the United States have operated for years despite high 

levels of fraud. For example, between July 2008 and March 2015, one agent 

location in Washington, D.C. generated at least 116 fraud complaints totaling 

$187,356. Even though reviews of the agent in June 2014 and February 2015 

identified confirmed and potential fraud amounting to 84% and 55% of the money 

transfers paid at that location, the agent was not terminated until August 2015, after 

it failed an undercover test visit by a compliance officer tasked with assessing the 

agent’s AML compliance. Another agent location in Detroit, Michigan, paid out at 

least 194 money transfers totaling $379,031 in reported fraud since 2004. 

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Although this agent has received Western Union’s fraud prevention training 

multiple times, it has continued to receive fraud complaints. 

42. Over the years, many other countries in addition to the United States 

have emerged as high-risk countries for fraud as international scams have become 

more pervasive. For example, from 2006 to 2012, the UK was the second highestpayout country for fraud-induced money transfers behind the United States. 

During that time, Western Union’s UK agents paid out over $82.4 million in 

reported fraud, and internal reports and records demonstrate that Western Union 

was aware of problems with particular agents in the UK. From January 1, 2004 to 

August 29, 2015, 172 UK agents paid out over $44.3 million in reported fraud. A 

subset of only 34 of these agents was responsible for paying out nearly half of the 

reported fraud (at least $21.2 million), most of which came from U.S. victims. The 

actual fraud paid out by these agents was likely much higher. Total payouts by 

these agents during the period they were receiving fraud complaints amounted to 

$389 million, with $154 million of that coming from U.S. senders. Notably, these 

agents also sent $104.6 million to Nigeria and $76.6 million to Romania, both of 

which are high-risk countries for fraud, as acknowledged by Western Union itself. 

One agent alone, News Mark, was the top fraud agent in the UK and worldwide. 

Between January 1, 2006 and January 14, 2013, Western Union received at least 

1,421 fraud complaints about News Mark totaling at least $2,150,892, of which 

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over 84%, or $1,815,582, involved U.S. victims. Although Western Union 

identified News Mark as a high-fraud agent in the company’s 60-day reports at 

least 45 times between 2005 and 2010, and reviewed it for fraud and other 

suspicious activities at least fifteen times between 2009 and 2012, Western Union 

suspended and reactivated News Mark at least three different times before finally 

terminating it in 2014. 

43. By 2007, Western Union was aware that Jamaica had become a 

hotbed for fraud. In that year alone, Western Union received at least 3,065 

complaints from U.S. consumers about money transfers totaling $1,878,435 to 

Jamaica. Over the years, the top four fraud payout agents in Jamaica have 

processed well over $1 million each in reported fraud, for a combined total of at 

least $5,210,644. According to internal Western Union reports, those agents also 

have engaged in other highly suspicious activities, such as surfing. One of those 

agents, for example, surfed at least 985 transactions in a single month in 2010. 

Even though all four of these agents have continued to receive many fraud 

complaints for years, including hundreds in 2015, they continue to operate. In fact, 

Western Union has only terminated one agent in Jamaica for consumer fraud. That 

termination occurred on July 3, 2015, and the terminated agent had a much smaller 

number of fraud complaints than others that Western Union has not terminated. 

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44. In 2008, according to Western Union’s records, Mexico was one of 

the top five countries worldwide for fraud payouts, with 1,393 complaints totaling 

over $1.8 million. In 2009, Mexico was Western Union’s sixth highest payout 

destination, with 1,626 complaints totaling over $2.1 million. Since 2011, it has 

consistently been in the top three destination countries for reported fraud payouts 

from U.S. consumers, and the top payout destination for fraud related to 

emergency scams. In 2011, Western Union received at least 2,824 emergency 

scam complaints on transfers paid out in Mexico. The total amount paid out on 

these transfers was $6,908,666, and the average payout was $2,446. Of those 

victims who reported their date of birth, nearly 70% were 65 years or older at the 

time they sent their money transfers. Although Western Union has at least three 

master agents in Mexico, internal reports and records show that one master agent, 

Elektra, has been responsible for paying out most of the emergency scam 

complaints. Of the reported emergency scam transfers paid out in Mexico between 

2011 and 2014, Elektra agents were responsible for payouts relating to at least 

7,107 complaints totaling $12,494,602, or 88% of the total reported losses. During 

that same period, nineteen Elektra agents paid out $6,425,782 in reported 

emergency fraud, including one agent discussed further below that alone paid out 

over $1.4 million in reported fraud. Nevertheless, and despite repeated reviews 

and investigations of agent locations in Mexico, as of October 2015, Western 

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Union had rarely, if ever, terminated agent locations in Mexico for consumer fraud, 

even in instances where particular agent locations repeatedly appeared on fraud 

reports, or had confirmed and potential fraud amounting to more than 25%, or even 

50%, of their payouts. 

45. By 2010, internal reports and records show that Western Union was 

aware of a substantial increase in fraud complaints involving money transfers sent 

to Spain, and that particular agents there had very high levels of fraud and 

questionable activity. From 2009 to 2010, the number of complaints paid out in 

Spain increased from 583 to 2,195, and the reported fraud amount rose from over 

$1.1 million to over $5.3 million. Indeed, from 2010 to 2012, Spain was the third 

highest payout country by amount for complained-of transfers, trailing only the 

United States and the UK. During that time, Western Union received at least 8,086 

complaints about transfers paid out in Spain, totaling over $17 million. From 2007 

to 2012, a subset of 61 agents in Spain paid out over $11.9 million in reported 

fraud. Western Union’s internal reports and records document numerous instances 

of suspicious activity by these agents, including flipping and sending money 

transfers to high-risk countries. The reported fraud paid out by agents in Spain, 

moreover, likely grossly understates the actual fraud. For example, 20 agents in 

Spain that were responsible for over $5.7 million in reported fraud received more 

than $51.6 million during the period those agents were receiving fraud complaints, 

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of which over $22.7 million came from U.S. consumers. During that time, those 

20 agents were responsible for sending over $8.8 million to Nigeria, over $3.7 

million to Canada, over $1.7 million to Romania, and over $800,000 to Ghana, 

which are all high-risk fraud countries. Although Western Union was aware of 

problematic agent locations in Spain, it failed to promptly suspend and terminate 

those agent locations. 

46. Prior to 2011, Western Union received a small number of complaints 

each year involving its Peruvian agents. For example, in 2010, Western Union 

recorded only 71 fraud reports against agents in Peru totaling $38,492. In 2011, 

however, there was a dramatic spike in complaints about money transfers paid out 

in Peru, especially about emergency scams, with Western Union receiving at least 

692 complaints totaling $2,218,761. The average transfer amount in the 

complained-of transactions jumped from $542 to $3,206. In 2012, the numbers 

increased to 1,003 fraud complaints totaling $1,944,730. Over 96% of the 

complained-of transfers paid out in Peru in 2011 and 2012 originated from the 

United States. Between 2011 and 2012, thirteen Peruvian agents paid out 

$3,603,539 in reported fraud, and together were responsible for nearly 87% of the 

total reported fraud payouts in Peru for those years. Internal reports and records 

show that Western Union was aware of the dramatic increase in complaints, as 

well as particular Peruvian agent locations that were responsible for paying out 

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most of the reported fraud. Despite its awareness, Western Union failed to 

terminate problematic agent locations until after law enforcement began to inquire 

and raise concerns about the fraud, and even then, one agent location terminated 

for consumer fraud was reactivated under a different agent ID. In recent years, 

Western Union has continued to receive complaints from U.S. consumers 

concerning high-dollar emergency scam-related money transfers paid out at agent 

locations in Peru. 

47. For many years, Nigerian scammers have been at the center of many 

international frauds. Although Western Union’s agent locations in Nigeria are in 

banks, those bank locations, too, have paid out large numbers of fraud-induced 

money transfers and engaged in other suspicious activities. According to Western 

Union’s records, Nigeria has been the fourth highest payout destination for fraud 

complaints received by Western Union since 2006. Since then, Western Union has 

received complaints about at least 48,047 money transfers paid out in Nigeria, 

totaling over $38.2 million. Approximately 86.7% of the complained-of transfers 

originated from the United States. During this period, a subset of 68 Western 

Union agent locations in Nigeria was responsible for at least 17,743 complaints 

totaling over $16.6 million in reported fraud. Based on the complaints, reported 

fraud is typically paid out at various locations of two large banks in Nigeria. 

Overall, one of those banks has at least 15,184 complaints totaling $11,292,195, 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 34 of 65 

while the other has at least 10,948 complaints totaling $8,167,769. Individual 

locations of the two banks also have amassed huge numbers of complaints. One 

location alone was responsible for at least 832 complaints totaling $1,407,252, 

while another was responsible for at least 1,741 complaints totaling $1,187,141. 

Despite repeated reviews and investigations of agent locations in Nigeria, as of 

October 2015, Western Union had rarely, if ever, terminated agent locations in 

Nigeria for consumer fraud. 

48. Over the years, agent locations in many other countries have appeared 

on Western Union’s fraud reports, and have been reviewed by the company for 

fraud. Those countries include, but are not limited to, Ghana, the Philippines, 

Bolivia, China, Malaysia, the Dominican Republic, Greece, and Thailand. Some 

of those agent locations continue to operate despite having high levels of fraud, 

while others have been suspended or terminated, but only after having caused 

substantial injury to consumers over many months or, in some cases, years. 

Government Agencies Worldwide Warned
 

Western Union about Consumer Fraud Involving Its System
 

49. In addition to consumer complaints and Western Union’s internal 

reports and records, Western Union’s awareness of the consumer fraud problem 

with its money transfer system is further demonstrated by the fact that law 

enforcement agencies in the United States and throughout the world have warned 

the company for many years that its money transfer system was being used to 

34
 
 

 

 

 

 

 

 

 

Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 35 of 65 

perpetrate consumer frauds, and that Western Union was not adequately addressing 

the problem. 

50. First, in or around 2002, multiple state Attorneys General issued 

subpoenas to Western Union in conjunction with their investigations of the use of 

Western Union’s money transfer system by fraudulent telemarketers. In 

correspondence dated October 1, 2002, the Vermont Attorney General’s Office 

informed Western Union about disturbing statistics regarding telemarketers in 

Quebec, Ontario, British Columbia, and Israel misusing Western Union’s money 

transfer system for frauds. 

51. In or around November 2005, Western Union entered into an 

agreement with forty-seven states and the District of Columbia involving the use of 

Western Union’s money transfer system by “fraudulent telemarketers in and 

outside the United States” (“2005 Agreement”). The 2005 Agreement imposed a 

number of requirements upon Western Union, including warnings to consumers, 

agent training, closure of agents, development of a computerized system to identify 

likely fraud, and increasing anti-fraud staff. For example, the 2005 Agreement 

required that Western Union “terminate those of its agents, subagents or locations, 

as the case may be, who are complicit in fraud-induced transfers or who knowingly 

ignore such fraud, or, if certain employees of the agent or subagent are the 

complicit or knowingly ignoring parties, insist upon termination of such employees 

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as a condition to continued agent or subagent status.” The 2005 Agreement was in 

effect for five years. Despite this agreement, as explained below, Western Union 

in many instances failed to terminate many problematic agent locations, especially 

in countries outside of the United States and Canada. 

52. In October 2009, the FTC announced that it had reached a settlement 

with MoneyGram International, Inc. (“MoneyGram”), Western Union’s main 

competitor, relating to charges that the company had allowed its money transfer 

system to be used for fraud. The FTC publicly released copies of the complaint 

and order against MoneyGram, which required, among other things, the 

termination of any agent that “may be complicit in” fraud. Following the FTC’s 

settlement with MoneyGram, FTC staff sent a letter to Western Union in 

November 2009 expressing concern about the “huge volume of fraud that employs 

money transfer services,” like that of Western Union. 

53. According to Western Union’s records, in or around September 2010, 

the Japan Financial Services Agency expressed concerns about Japanese 

consumers sending fraud-induced money transfers to the UK, and “suspicious 

viewing/surfing of transactions in the United Kingdom, resulting in either Paid in 

Error (PIE) or Non Payment Claims [complaints about money transfers being paid 

to the wrong person or not being paid].” 

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54. Since at least June 2011, the Minnesota Attorney General’s Office 

has been warning Western Union in correspondence directed to the attention of the 

President and Chief Executive Officer that “each year thousands of consumers are 

defrauded through use of your company’s services,” and that “[g]iven your firm’s 

apparently continuing inability or unwillingness to detect and prevent such wire 

transfer fraud, it would seem appropriate to” issue refunds to consumers. This 

correspondence has routinely described the consumer complaints the Minnesota 

Attorney General has received from fraud victims. In response, Western Union 

typically has refused to issue any refunds to the victims after the funds were paid 

out. 

55. In or around October 2011, multiple state Attorneys General issued 

subpoenas to Western Union in connection with investigations of fraudulent 

telemarketers’ use of Western Union’s money transfer system. The subpoena 

issued by Vermont stated that it had “reason to believe that Western Union has 

provided substantial assistance to fraudulent telemarketers in the form of access to 

its money transfer system, despite knowing, or consciously avoiding knowing, of 

the fraud, in violation of the Vermont Consumer Fraud Act, 9 V.S.A. § 2453(a).” 

56. On or about November 29, 2011, Western Union personnel met with 

the Korea Financial Supervisory Services to discuss the regulator’s concerns about 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 38 of 65 

consumer fraud involving Western Union’s money transfer system and its 

requirement that Western Union put together a plan to alleviate consumer fraud. 

57. In February 2012, in response to a survey sent to law enforcement by 

Western Union, a Special Agent for the U.S. Secret Service warned Western Union 

of the following: that its services were “widely used by Nigerian scammers and 

other criminal elements overseas”; “a person in America can easily be robbed by 

someone in a foreign country and there is almost no possibility to recover that 

fraud loss”; its “services are widely used for online scams in the US”; and that 

Western Union “is a complete and almost total safe haven for the criminal element 

to freely launder illegal proceeds without detection.” 

58. According to Western Union’s records, by the first quarter of 2012, 

the Serious Organised Crime Agency (“SOCA”) in the United Kingdom, presently 

known as the National Crime Agency, disclosed to Western Union that in relation 

to an “investigation conducted on money remitters in Western England,” SOCA 

had “surveyed Western Union customers and found that 81% of the transactions 

paid in Nigeria or Ghana were allegedly fraud related.” 

59. In or around late May 2012, the Toronto Police Service sent Western 

Union a letter alerting the company that it “may have aided individuals with the 

criminal offense of laundering [the] proceeds of crime” from consumer frauds, and 

cautioning that it needed to take “the appropriate steps . . . to ensure that Western 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 39 of 65 

Union is not a party to this serious criminal offense, whether intentionally or 

willfully blind to its role.” In numerous additional instances, the Toronto Police 

Service emailed Western Union information about other fraud-induced money 

transfers and the names of individuals who had collected the transfers, telling the 

company to consider the emails a formal caution that allowing the individuals to 

collect future transfers could be considered “aiding the criminal offence of 

Laundering the Proceeds of Crime.” 

60. In or around October 2012, Western Union received a letter from 

SEPBLAC, Spain’s Financial Intelligence Unit and Anti-Money 

Laundering/Counter Financing of Terrorism Supervisory Authority, informing 

Western Union that an inspection had revealed “extremely serious facts,” which 

required WUPSIL to “adopt urgent measures in order to correct them 

immediately,” and that the operations of a “significant part of” Western Union’s 

agents in two networks owned by Western Union “are related to fraud and money 

laundering.” 

DESPITE AWARENESS OF THE FRAUD,
 

WESTERN UNION HAS CONTINUED TO PROVIDE
 

SUBSTANTIAL ASSISTANCE OR SUPPORT TO CONSUMER FRAUDS
 

61. Since at least January 2004, and continuing thereafter, Western Union 

has been aware that perpetrators of frauds have used its money transfer system to 

obtain funds from their victims, and for many years has knowingly, or with 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 40 of 65 

conscious avoidance of knowledge, provided substantial assistance or support to 

fraudulent telemarketers and con artists. 

62. In some cases, Western Union’s agents, subagents, or FLAs have been 

complicit, or sometimes even participated, in the frauds. In other cases, Western 

Union’s agents, subagents, or FLAs have offered substantial assistance or support 

to the frauds by paying out funds in violation of Western Union’s own policies and 

procedures. 

63. Western Union has provided an essential service to these fraudulent 

telemarketers, sellers, and con artists by permitting them access to Western 

Union’s money transfer system. Exploiting this access to its full potential, 

telemarketing, mass marketing, and imposter scams have received, and continue to 

receive, millions of dollars from victimized consumers, while generating 

substantial revenue for Western Union from transaction fees and foreign currency 

exchange fees. 

64. For many years, Western Union has failed to: (a) promptly 

investigate, suspend, and terminate potentially complicit agents and subagents, or 

agents and subagents that have failed to comply with Western Union’s anti-fraud 

and/or AML policies and procedures; (b) conduct adequate due diligence on 

prospective and existing agents and subagents; (c) effectively train, monitor, and 

review its agents, subagents, and FLAs; (d) adequately collect, record, and report 

40
 
 

 

 

 

 

 

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consumer fraud involving its money transfer system; and (e) take other reasonable 

steps to prevent fraudulent telemarketers, sellers, and con artists from using 

Western Union’s money transfer system to perpetrate their frauds. 

65. In numerous instances, Western Union has failed to take timely, 

appropriate, and effective measures to mitigate fraud in connection with its 

processing of money transfers sent by consumers despite knowledge, or conscious 

avoidance of knowledge, that: fraudulent telemarketers, sellers, and con artists 

have extensively accessed and exploited Western Union’s money transfer system; 

Western Union’s money transfer system has played an integral role in the scams; 

and a number of its agents have been complicit, or involved, in the frauds, or have 

failed to adhere to Western Union’s policies and procedures to detect and prevent 

fraud. 

Western Union Has Failed to Promptly Investigate, Suspend, 

and Terminate Agents with High Levels of Consumer Fraud 

66. Despite Western Union’s awareness of consumer fraud involving its 

system, Western Union has in many instances failed to promptly investigate, 

suspend, and terminate agents and subagents that have exhibited high levels of 

consumer fraud, some of which were likely complicit in frauds, or which have 

ignored such frauds by failing to comply with Western Union’s policies and 

procedures, thereby causing significant and ongoing harm to consumers. 

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67. Even though Western Union’s internal reports have identified agent 

locations where 5% to over 75% of the transactions (in volume or amount) 

constituted confirmed and potential fraud, and/or suspicious activities, such as 

surfing, flipping, and data integrity issues, Western Union has allowed many of 

these agents and subagents to continue operating, with only temporary 

suspensions, if any. In many cases, Western Union has simply “escalated,” or 

referred, such agents for further review or investigation, but the investigations 

often have been delayed for months, and in many instances, the escalations have 

failed to resolve the problems. Western Union frequently has relied on its master 

agents to conduct their own investigations of their subagents and locations, but has 

failed to ensure that the master agents’ investigations are adequate. Western Union 

also has sometimes repeatedly escalated the same agents for review or 

investigation without suspending or eventually terminating those agents even while 

the agent has continued to be the subject of fraud complaints. Western Union has 

sometimes even disregarded recommendations from its employees to suspend or 

terminate certain agents or subagents due to serious consumer fraud problems. 

68. Western Union has permitted agents and subagents that have 

processed hundreds of thousands of dollars, or even millions of dollars, in 

confirmed and potential fraud to continue operating for months or even years 

despite highly suspicious activities and indications of complicity. For example, 

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one agent location in Spain, Locutorio Okuns, operated from 2005 until at least 

2012. During that time, the agent engaged in highly suspicious activity, including 

making payouts related to 126 complaints totaling at least $341,771 in reported 

fraud, and receiving over $1 million from the United States in money transfers that 

had characteristics indicative of fraud, such as unusually high-dollar amounts and 

serious data integrity issues. The agent also displayed highly suspicious spikes in 

volume that corresponded with spikes in fraud complaints. Although it was 

reviewed by Western Union at least five times, the agent was permitted to continue 

to operate for years, and its owner was ultimately one of the individuals arrested by 

the Spanish police in 2014, as described above. Another agent location in the UK, 

S S Newsagent, made payouts relating to at least 347 complaints totaling $924,695 

in reported fraud between 2005 and 2012. That agent received over $2.7 million in 

money transfers from the United States, including over $1 million in 2007 alone, 

and the majority of those transactions had characteristics indicative of fraud, 

including unusually high-dollar amounts and data integrity issues. Even though 

the agent was reviewed multiple times, it was not terminated despite its history as a 

high-fraud agent. 

69. Even in instances where Western Union has suspended high-fraud 

agents after a few months rather than years, the agents often have generated 

significant consumer losses that Western Union could have prevented by acting 

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more quickly. These agents frequently are immediately identifiable based on 

spikes in fraud complaints during the first problematic month. For example, 

during a 30-day period beginning in December 2011, Western Union received 54 

complaints, totaling $246,746, concerning money transfers paid out at one agent 

location in Bolivia. This location had a Nigerian owner and had already been 

reviewed by Western Union in the past due to suspicious activity involving 

millions of dollars in payouts from China. Western Union failed to promptly 

suspend the agent and during a roughly four-month period from December 2011 to 

April 2012, it was responsible for paying out at least 191 transfers associated with 

fraud complaints totaling $825,319. The average reported fraud transfer was 

$4,321, and all of the complaints involved U.S. senders who were the victims of 

emergency scams. Although this agent was suspended in July 2012, it had paid out 

over $2.5 million in suspected fraud in just over four months before Western 

Union took action. 

70. In instances where Western Union suspended agents or subagents due 

to consumer fraud, the suspensions often were only temporary, even in high-risk 

fraud countries, such as Nigeria, Ghana, and Jamaica. For example, in or around 

2012, Western Union identified and suspended 13 agent locations in Montego Bay, 

Jamaica, that had been processing millions of dollars of fraudulent and potentially 

fraudulent money transfers related to lottery/sweepstakes fraud. The suspensions 

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only lasted a short time, however, before the agents were reactivated. After being 

reactivated, ten of those agents have continued to pay out tens to hundreds of 

reported fraud complaints each year since 2013, and in that span have been the 

subject of 2,055 complaints totaling $737,319. 

71. In some instances, reactivated agents or subagents were assigned new 

agent ID numbers or became subagents in different agent networks. For example, 

Western Union’s top fraud payout agent in Mexico made payouts relating to at 

least 410 complaints totaling over $1.4 million in reported fraud between March 

2011 and July 2012. Western Union finally suspended the location in July 2012, 

but one month later, the same agent began to operate again under a new agent ID, 

and it continued generating fraud complaints. In addition, Western Union even 

reactivated some agents that had been terminated due to consumer fraud. 

72. Western Union’s general practice has been to attempt to rehabilitate 

agents and subagents exhibiting high levels of consumer fraud by requiring its 

agents to implement “action plans” to address the problems, but this practice has 

been inadequate and ineffective. In many instances, Western Union or its agents 

have failed to create action plans that effectively address consumer fraud. The 

action plans also often do not adequately and effectively address problems with 

agents, subagents, and FLAs who are potentially complicit and/or have engaged in 

suspicious activities. For example, the action plans frequently call for the training 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 46 of 65 

of agent locations and FLAs even though Western Union has acknowledged that 

“identifying and eliminating complicit actors from the system is more effective at 

combating consumer fraud than training.” In other instances, Western Union or its 

agents have failed to create any action plan or for months have delayed creating 

action plans. Even after action plans have been created, in some cases, the agents 

and subagents have resisted implementing them, failed to do so satisfactorily, or 

even ignored them. 

73. For many years, suspensions and/or terminations were typically 

limited to agents in the United States and Canada. For example, between January 

1, 2006 and November 1, 2010, Western Union failed to terminate many 

problematic agent locations worldwide that had paid out $100,000 or more in 

reported fraud, including in the UK (124 agents), Nigeria (56 agents), Ghana (18 

agents), Jamaica and Spain (16 agents each). In fact, two UK agents each were 

responsible for paying out over $2 million in reported fraud between January 1, 

2006 and November 1, 2010. Moreover, as of October 2015, Western Union had 

rarely, if ever, terminated agent locations for fraud in certain high-risk countries, 

including, but not limited to, Mexico, Nigeria, Ghana, the Dominican Republic, 

China, and Haiti, despite high levels of fraud and indications of complicity at agent 

locations. 

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Western Union Has Failed to Conduct Adequate Due Diligence on Agents 

74. For many years, Western Union has failed to conduct adequate due 

diligence on its prospective agents and subagents, as well as those agents and 

subagents whose contracts come up for renewal. Western Union either has not 

conducted background checks on many of its agents and subagents, or to the extent 

background checks have been conducted, they often have been inadequate. It also 

has, in many instances, failed to maintain records demonstrating that it has 

conducted such background checks. In addition, despite awareness of problems 

with FLAs, Western Union does not conduct any due diligence on, and frequently 

knows little about, its agents’ and subagents’ FLAs. 

75. For many years, Western Union has failed to conduct routine 

background checks of each of its prospective and existing agents and subagents 

located around the world. Even though Western Union’s agreements provide it 

with the authority to conduct background checks on its agents or subagents at any 

time, Western Union’s practice in many countries has been to rely on its agents to 

conduct due diligence on their own subagents and FLAs, rather than conduct its 

own background checks, including of subagents operating in high-risk fraud 

countries. In some instances, Western Union has approved agents or allowed 

existing agents to continue operating without even knowing the identities of all 

individuals with ownership, or beneficial ownership, interests in the agent. In 

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other instances, Western Union has not known, and has not required its agents to 

disclose or update, the identities of all of its subagents or FLAs. 

76. In numerous instances, background checks conducted by Western 

Union have not been thorough, consisting only of collecting limited information 

and conducting some type of credit or financial check, rather than criminal 

background checks of its agents and subagents. In many cases, Western Union has 

relied upon inaccurate, incomplete, or false information provided by agents and has 

failed to verify the accuracy of information provided by applicants. Western 

Union also has installed agents or subagents with criminal histories, including 

felonies and misdemeanors involving dishonesty, as well as histories of 

investigations and lawsuits involving allegations of fraud. For many years, the 

department at Western Union primarily responsible for conducting background 

checks has not been provided with sufficient information to conduct thorough 

background checks of every prospective and existing agent and subagent, such as 

information from law enforcement, information about investigations of agent 

locations, and access to consumer complaints. 

77. In some cases, Western Union has installed agents or subagents that it 

had previously terminated, that were previously suspended or terminated by 

MoneyGram for fraud, or that were concurrently operating as MoneyGram agents 

(in violation of Western Union’s agent agreements). One Western Union agent in 

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College Park, Georgia, for example, was suspended in 2006 due to consumer 

fraud, but began operating again in 2007 from the same address, but with a 

different business name and agent ID number, until it was suspended for fraud 

again. The agent then became a MoneyGram agent and continued to generate 

fraud-induced money transfers for approximately one year before being terminated 

by MoneyGram. After that, the agent returned to Western Union in 2009, and 

began operating for a third time with the same name and at the same location. A 

review in 2012 revealed that approximately 80% of its payouts were attributable to 

fraud, and it was later terminated. In 2015, the agent began operating again as a 

Western Union agent from the same address, using a similar name, but with a new 

agent ID number, and once again, it began generating fraud complaints. 

78. Western Union’s background checks also have failed to prevent 

previously terminated agents or subagents from using straw men to become agents 

or owners again to gain access to Western Union’s money transfer system. In 

addition, Western Union has installed as agents or subagents individuals who had 

previously been interdicted (i.e., blocked from using Western Union’s money 

transfer system) due to suspicious activities, or were former FLAs at agent 

locations that were suspended or terminated for fraud. For example, after 

suspending an agent location in the Philippines due to high levels of fraud, 

Western Union discovered that the owner of the location had been a high-volume 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 50 of 65 

sender to Nigeria who Western Union had interdicted just two months before the 

location began operating. During the three-month period before the agent location 

was suspended, it generated at least 173 fraud complaints totaling $316,400, and 

paid out over $1.2 million in suspected fraud. 

Western Union Has Failed to Effectively Train, Monitor, and Review Agents 

79. For many years, Western Union has failed to effectively train, 

monitor, and review its agents, subagents, and FLAs to detect and prevent 

consumer fraud and to prevent potential complicity at agent locations. 

80. For many years, Western Union has provided only limited training to 

agents and subagents with respect to detecting and preventing consumer fraud, and 

its training overall has been inadequate and ineffective. In many instances, FLAs 

responsible for processing fraud-induced money transfers at Western Union’s 

agent locations have not been knowledgeable about Western Union’s anti-fraud 

and/or AML policies and procedures, including with respect to detecting and 

preventing fraud, properly recording customers’ biographical information and IDs, 

and addressing suspicious activities. Western Union also has not had an adequate 

and effective system in place to ensure that FLAs are knowledgeable in these 

areas. As a result, in many instances, Western Union’s high-fraud agent locations 

have violated the company’s policies and procedures by failing to collect proper 

IDs or biographical information from recipients of money transfers, accepting 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 51 of 65 

improper forms of IDs, or recording obviously incorrect or fictitious ID 

information into Western Union’s system. 

81. Western Union’s complaint database shows that its agent locations 

that have paid out fraud-induced money transfers frequently have permitted 

fraudsters to pick up money transfers using fake IDs, or without recording IDs or 

other required information. For example, in many instances, these agent locations 

have recorded the same IDs for multiple recipients, or different IDs for the same 

recipients. In addition, for tens of thousands of fraud-induced money transfers, 

Western Union’s records frequently show no birthdates, or facially invalid 

birthdates, such as “1/1/1900,” for the recipients. Western Union’s records also 

show that its agent locations have paid out at least 32,764 money transfers of 

$1,000 or more that consumers reported as fraudulent from 2004 through August 

2015 without recording any ID information for the recipients. 

82. In addition, despite Western Union’s 2005 Agreement with the 

States, which required Western Union to “commence a program of person-toperson or telephone training at agent locations known to have a materially elevated 

level of outgoing or incoming fraud-induced transfers sent from the United States 

to anywhere except Mexico,” in many cases, and especially with respect to foreign 

agents and subagents, Western Union failed to comply with this requirement. For 

example, with respect to many of its foreign agent locations that have exhibited 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 52 of 65 

high fraud levels, Western Union’s practice was only to train the master agents and 

not to conduct person-to-person or telephone training at the agent locations that 

exhibited high levels of fraud. 

83. For many years, Western Union has failed to adequately monitor its 

agents’ activity for fraud. In many instances, Western Union employees 

responsible for monitoring the activities of agent locations have not been provided 

with sufficient information or resources to adequately monitor Western Union’s 

agents, subagents, and FLAs. For example, in some instances, Western Union has 

assigned more than one agent ID number to a single agent or subagent without 

providing Western Union employees with the means to easily locate all of the 

agent’s or subagent’s ID numbers in Western Union’s system. Western Union has 

similarly failed to provide its employees with the means to easily identify agents or 

subagents with common ownership. In addition, in some cases, Western Union’s 

employees have been unable to identify problematic FLAs because FLAs have not 

used unique IDs when processing money transfers. Western Union’s employees 

also sometimes have not had complete and historical information about particular 

agents and subagents, including information about all fraud complaints, prior 

reviews, investigations, and internal reports related to fraud, as well as 

transactional activity. Therefore, Western Union employees responsible for 

monitoring agent activity may not have been aware of all relevant information. 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 53 of 65 

84. Western Union has failed to conduct adequate and routine onsite 

compliance reviews of its agent locations worldwide. Western Union often has 

relied on its master agents to conduct reviews, but has failed to ensure that those 

master agents are conducting adequate and effective oversight of their subagents 

and locations. In some cases, those agents have not even allowed Western Union 

employees to visit locations without them being present. In other cases, Western 

Union’s employees have not been able to conduct independent onsite reviews of 

certain locations because they were in areas considered too dangerous to visit. 

Western Union also has failed to conduct adequate and routine onsite reviews of 

many of its independent agents. 

85. For many years, consumer fraud was not even routinely addressed in 

compliance reviews of agents. Even after it was added to the list of topics for these 

reviews, consumer fraud for many years was addressed only in a cursory manner. 

In addition, in many instances, Western Union employees who conduct compliance 

reviews have not been provided with information about fraud complaints received 

involving the agents being reviewed, so the employees could not adequately 

address issues related to the complaints in their reviews. 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 54 of 65 

Western Union Has Failed to Adequately Collect, Record, 

and Report Consumer Fraud Involving Its Money Transfer System 

86. Since at least January 2004, Western Union has maintained a 

complaint database, which contains information relating to complaints or reports 

the company receives about fraud-induced money transfers. 

87. The information contained in Western Union’s complaint database 

significantly understates the number of actual fraud-induced money transfers and 

losses reported to the company. Despite receiving information from consumers, 

their family members, or law enforcement representatives about fraud-induced 

money transfers, Western Union often has failed to record information about all of 

those money transfers in its complaint database. In other instances, Western Union 

has failed to record in its database any of the victims’ fraud-induced money 

transfers. 

88. Up until in or around December 2011, Western Union did not provide 

any toll-free number that consumers in countries other than the United States and 

Canada could use to report fraud and to try to stop the payout of a fraud-induced 

money transfer. For example, Western Union did not provide fraud hotlines for 

consumers in Germany, Mexico, Spain, and the UK until December 2011, for 

consumers in Australia, Japan, and Malaysia until February 2012, and for 

consumers in Austria, Belgium, Luxembourg, and Switzerland until August 2012. 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 55 of 65 

89. Western Union uses the information in its complaint database to 

administer its anti-fraud program, so it is important that the database be accurate 

and complete. For example, Western Union uses this information to: (a) monitor 

and identify agents, subagents, and FLAs that may be complicit in frauds; (b) 

create automated rules regarding particular corridors (e.g., limiting the number and 

amount of money transfers to receivers); and (c) interdict individuals who are the 

victims or the perpetrators of frauds. Therefore, Western Union’s failure to keep 

accurate and complete records of fraud-induced money transfers has impeded its 

efforts to detect and prevent consumer fraud. 

90. Although Western Union employees have brought the underreporting 

of fraud-induced money transfers in the company’s complaint database to the 

attention of those responsible for maintaining the database, Western Union has 

failed to take adequate corrective action, if any, to address the problem. 

91. Although the Financial Crime Enforcement Network (“FinCEN”), 

the primary administrator of the BSA, requires money services businesses like 

Western Union to file Suspicious Activity Reports (“SARs”) relating to fraud, 

Western Union has, in many cases, failed to file SARS on, and identify as the 

subject of SARS, particular agent locations in foreign countries that have 

processed high levels of fraud-induced money transfers sent by U.S. consumers 

and exhibited other suspicious activities. 

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Western Union Has Failed to Take Other Reasonable Measures to
 

Mitigate Fraud in Connection With Its Processing of Money Transfers
 

92. For many years, Western Union has failed to take other reasonable 

measures to mitigate fraud in connection with its processing of money transfers, 

ignoring in some instances useful suggestions and recommendations from its 

employees and representatives of law enforcement agencies. These types of 

measures include, but are not limited to, the following: bolstering its ID 

requirements for sending or receiving money transfers, such as by imposing more 

robust ID requirements; requiring the collection of additional biographical 

information; implementing more controls for noncompliant transactions or 

potentially fraud-induced money transfers, including, but not limited to, 

transactions with data integrity issues and to high-risk countries; improving the 

company’s handling of, and ability to receive, complaints about fraud worldwide; 

and improving its interdiction system to be more effective in blocking money 

transfers associated with consumer fraud, including, but not limited to, by 

permanently blocking payouts to the recipients of fraud-induced money transfers. 

93. Western Union has made it difficult for employees to take meaningful 

action to detect and prevent consumer fraud, including by failing to provide 

employees with sufficient information or resources, including complete records of 

consumer fraud complaints, as well as information about law enforcement 

contacts, investigations, and actions. For many years, departments within Western 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 57 of 65 

Union responsible for handling consumer fraud issues did not routinely share 

consumer fraud information with other groups or departments. 

94. Although Western Union relies on its agents to comply with Western 

Union’s anti-fraud and AML programs, and to oversee the activity of their own 

subagents, locations, and FLAs, it often fails to provide its agents with the 

information necessary to conduct effective fraud reviews and to detect and prevent 

consumer fraud, including the potential complicity of particular agent locations and 

FLAs. For example, Western Union typically does not share with the agents 

themselves complaints it has received about fraud-induced money transfers 

processed by the agent locations or FLAs. Therefore, despite being tasked with 

overseeing the conduct of their own subagents, locations, and FLAs, Western 

Union’s agents in many cases are unaware of the nature, details, history, and 

volume of complaints involving the agent locations and FLAs. 

95. Western Union and its agents also have failed to provide adequate 

and effective warnings to consumers about the fraud occurring through its money 

transfer system. Although Western Union provides some warnings on the first 

page of send forms located at some of its agent locations, in many cases, these 

warnings are not clear and conspicuous to many consumers. In addition, Western 

Union’s agent locations have failed to provide routine verbal warnings to 

consumers before they initiated money transfers, even in instances where 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 58 of 65 

consumers’ money transfers have displayed obvious signs of fraud, such as highdollar money transfers by elderly consumers to countries known for fraud. 

Therefore, consumers often have been unaware of the risks associated with sending 

money through Western Union’s money transfer system. 

WESTERN UNION HAS FOR MANY YEARS FAILED 

TO MAKE EFFECTIVE CHANGES TO PREVENT FRAUD
 

96. Even after January 2011, when Western Union claimed in a written 

report to have implemented “a comprehensive anti-fraud program” to protect 

consumers, Western Union still failed to adopt an adequate and effective anti-fraud 

program. Although as a result of the FTC’s investigation, Western Union has 

improved aspects of its anti-fraud program since 2012, the company still failed in 

certain cases to promptly terminate agents around the world that appeared to be 

complicit in paying out the fraud-induced money transfers, including numerous 

agents in Spain that operated between January 2011 and December 2012, and were 

arrested by the Spanish police in 2014 for their role in laundering large sums of 

money received from the fraud victims. As of October 2015, Western Union had 

rarely, if ever, terminated agent locations for fraud in certain high-risk countries, 

including, but not limited to, Mexico, Nigeria, Ghana, the Dominican Republic, 

China, and Haiti, despite high levels of fraud and indications of complicity at agent 

locations. 

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97. In numerous instances, Western Union has permitted agent locations 

to continue operating for months or years despite high levels of fraud and other 

suspicious activities. For example, from July 2009 to as recently as August 2015, 

an agent location in Malaysia made payouts relating to at least 252 fraud 

complaints totaling $389,061. Although the agent appeared on fraud reports and 

was reviewed for fraud many times between 2010 and 2014, the agent has not been 

terminated. In fact, in 2014, company executives approved the reactivation of that 

agent despite being informed that confirmed and potential fraud, as well as 

suspicious activity, amounted to approximately 54% of the agent’s pay volume. 

An agent location in Greece made payouts relating to at least 106 fraud complaints 

totaling $193,696 from July 2013 to October 2014. From 2012 to 2014, the agent 

paid out $5.4 million in money transfers, of which approximately $3.7 million 

were for $1,000 or more. That agent operated for over two years despite appearing 

on internal fraud or agent complicity index reports multiple times and being 

reviewed for fraud at least three times with findings of suspicious activities. From 

September 2013 to August 2015, an agent in Thailand paid out money transfers 

associated with at least 1,197 complaints totaling $425,409, of which 336 

complaints totaling $117,290 were paid out in April 2015 alone. That agent was 

allowed to continue operating, despite a review in 2013 finding that 63% of the 

agent’s transactions in two months amounted to confirmed fraud and questionable 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 60 of 65 

activity, and a review in 2015 associated with three of its agent ID numbers finding 

that 25% of its activity in one month, amounting to over $1.2 million, was 

connected to fraud. 

VIOLATIONS OF THE FTC ACT 

98. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair” or 

“deceptive” acts and practices in or affecting commerce, including acts or practices 

involving foreign commerce that “cause or are likely to cause reasonably 

foreseeable injury within the United States” or “involve material conduct occurring 

within the United States.” 

99. Acts or practices are unfair under Section 5 of the FTC Act if they 

cause substantial injury to consumers that consumers cannot reasonably avoid 

themselves and that is not outweighed by countervailing benefits to consumers or 

competition. 15 U.S.C. § 45(n). 

COUNT I 

Unfair Acts or Practices 

100. In numerous instances, in operating its worldwide money transfer 

system, Defendant has failed to take timely, appropriate, and effective action to 

detect and prevent fraud-induced money transfers through Defendant’s system, as 

described above. 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 61 of 65 

101. Defendant’s actions cause or are likely to cause substantial injury to 

consumers that consumers cannot reasonably avoid themselves and that is not 

outweighed by countervailing benefits to consumers or competition. 

102. Therefore, Defendant’s practices as described in Paragraph 100 above 

constitute unfair acts or practices in violation of Section 5 of the FTC Act, 15 

U.S.C. §§ 45(a) and 45(n). 

THE TSR 

103. Congress directed the FTC to prescribe rules prohibiting abusive and 

deceptive telemarketing acts or practices pursuant to the Telemarketing Act, 15 

U.S.C. §§ 6101-6108. The FTC adopted the original TSR in 1995, extensively 

amended it in 2003, and amended certain provisions thereafter. 16 C.F.R. Part 

310. 

104. Defendant, its agents, or subagents have processed money transfers 

and provided related services on behalf of persons who are “sellers” or 

“telemarketers” engaged in “telemarketing,” as those terms are defined in Sections 

310.2 (dd), (ff), and (gg) of the TSR. 

105. The TSR prohibits telemarketers and sellers from making a false or 

misleading statement to induce any person to pay for goods or services. 16 C.F.R. 

§ 310.3(a)(4). 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 62 of 65 

106. The TSR also prohibits telemarketers and sellers from, among other 

things, requesting or receiving payment of any fee or consideration in advance of 

obtaining a loan or other extension of credit when the seller or telemarketer has 

guaranteed or represented a high likelihood of success in obtaining or arranging a 

loan or other extension of credit. 16 C.F.R. § 310.4(a)(4). 

107. It is a violation of the TSR for any person to provide “substantial 

assistance or support” to any seller or telemarketer when that person “knows or 

consciously avoids knowing” that the seller or telemarketer is engaged in any act 

or practice that violates Sections 310.3(a), (c), or (d), or 310.4 of the TSR. 

16 C.F.R. § 310.3(b). 

108. On December 14, 2015, the FTC published a notice that it had 

adopted amendments to the TSR, including a prohibition against using “cash-tocash” money transfers for outbound and inbound telemarketing transactions. 80 

Fed. Reg. 77520 (Dec. 14, 2015). This prohibition became effective on June 13, 

2016. 

109. Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. 

§ 6102(c), and Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation 

of the TSR constitutes an unfair or deceptive act or practice in or affecting 

commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 63 of 65 

VIOLATIONS OF THE TSR
 

COUNT II
 

Assisting and Facilitating TSR Violations 

110. In numerous instances, in the course of processing money transfers, 

Defendant, its agents, or subagents have provided substantial assistance or support 

to sellers or telemarketers who Defendant or its agents or subagents knew or 

consciously avoided knowing: 

a. Induced consumers to pay for goods and services 

through the use of false or misleading statements, 

including, without limitation, the statement that the 

consumer has won and will receive a large cash award if 

the consumer pays a requested fee or fees, in violation of 

Section 310.3(a)(4) of the TSR, 16 C.F.R. § 310.3(a)(4); 

and 

b. Requested or received payment of a fee or 

consideration in advance of consumers obtaining a loan 

when the seller or telemarketer has guaranteed or 

represented a high likelihood of success in obtaining or 

arranging a loan for a person in violation of Section 

310.4(a)(4) of the TSR. 

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Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 64 of 65 

111. Defendant’s acts or practices, as described in Paragraph 110 above, 

constitute deceptive telemarketing acts or practices that violate the TSR, 16 C.F.R. 

§310.3(b). 

CONSUMER INJURY 

112. Consumers have suffered and will continue to suffer substantial injury 

as a result of Defendant’s violations of the FTC Act and the TSR. In addition, 

Defendant has been unjustly enriched as a result of its unlawful acts or practices. 

Absent injunctive relief by this Court, Defendant is likely to continue to injure 

consumers, reap unjust enrichment, and harm the public interest. 

THIS COURT’S POWER TO GRANT RELIEF 

113. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court 

to grant injunctive and such other relief as the Court may deem appropriate to halt 

and redress violations of any provision of law enforced by the FTC. The Court, in 

the exercise of its equitable jurisdiction, may award ancillary relief, including 

rescission or reformation of contracts, restitution, the refund of monies paid, and 

the disgorgement of ill-gotten monies, to prevent and remedy any violation of any 

provision of law enforced by the FTC. 

PRAYER FOR RELIEF 

114. WHEREFORE, Plaintiff, the Federal Trade Commission, pursuant to 

Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), Section 6(b) of the Telemarketing 

64
 
Act, 15 U.S.C. § 6105(b), and the Court's own equitable powers, requests that the 

Court: 

1. Enter a permanent injunction to prevent future violations of the FTC 

Act and the TSR by Defendant; 

2. Award such relief as the Court finds necessary to redress injury to 

consumers resulting from Defendant's violations of the FTC Act and the 

TSR, including, but not limited to, rescission or reformation of contracts, 

restitution, the refund of monies paid, and the disgorgement of ill-gotten 

monies; and 

3. Award Plaintiff the costs of bringing this action, as well as such other 

and additional relief as the Court may determine to be just and proper. 

Dated: January 19, 2017 Respectfully Submitted, 

DA YID C. SHONKA 

Acting General Counsel 

~~~6'l\tJIT04125) JOANNIE T. WEI (IL 6276144) 

ELIZABETH C. SCOTT (IL 6278075) 

Attorneys for Plaintiff 

Federal Trade Commission 

55 West Monroe Street, Suite 1825 

Chicago, Illinois 60603 

(312) 960-5634 (telephone) 

(312) 960-5600 (facsimile) 

kdodge@ftc.gov (Dodge) 

jwei@ftc.gov (Wei) 

escott@ftc.gov (Scott) 

65 

Case 1:17-cv-00110-CCC Document 1 Filed 01/19/17 Page 65 of 65