A further multimillion-dollar distribution of funds from Western Union to victims of fraud perpetrated via its payment network has begun, following a previous payout of $365m.
The new $40m tranche of money was forfeited by the Colorado-headquartered financial services giant to the Department of Justice (DoJ) to reimburse 25,000 victims in the US and abroad.
This represents the first distribution of the second phase of the Western Union Remission, which was opened in March 2022 to provide victims who had not filed petitions in the first an opportunity to get their money back.
That first phase paid out $365m to 148,000 victims.
The scheme stems from a 2017 deferred prosecution agreement in which Western Union acknowledged responsibility for various criminal acts including violations of the Bank Secrecy Act and “aiding and abetting wire fraud.”
It agreed to forfeit $586m in total to fully reimburse victims for multiple scams where fraudsters convinced their marks to send money via Western Union.
These included “sweepstake scams,” where victims are told they’ve won a large cash prize but need to pay a fee or tax to claim it, and “grandparent scams,” where fraudsters impersonate a family member who urgently needs money wired to them to avoid personal harm. Romance scams were another favorite where Western Union was used as the payment system of choice by the fraudsters.
The DoJ claimed that “certain owners, operators or employees” at the financial services firm were complicit in this fraud and that Western Union “aided and abetted” the schemes by failing to suspend or sack these agents.
“Today’s distribution of $39.6m to thousands of victims to compensate them for their losses demonstrates our commitment to hold all responsible parties accountable and to ensure justice for the victims who were financially harmed,” said US attorney for the Middle District of Pennsylvania, Gerard Karam.
“We thank our law enforcement partners who continue to work tirelessly on behalf of the victims.”
The DoJ continues to accept petitions for remission from fraud victims and said it anticipates authorizing more distributions in the coming months.
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