Western Union to Forfeit $586 Million For Fraud, Money Laundering

January 20, 2017 by · Leave a Comment 

The Western Union Co. has agreed to forfeit $586 million and admitted to crimes in connection with money laundering and fraud schemes, in an agreement announced Thursday by the U.S. Justice Department and Federal Trade Commission.

In its agreement with the Justice Department, Western Union admits to criminal violations, including willfully failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud, officials said.

According to the written admissions, between 2004 and 2012, Western Union violated the Bank Secrecy Act and anti-fraud statutes by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.

As part of the scheme, offenders contacted victims in the United States and falsely posed as family members in need. Or, they promised prizes or job opportunities, according to a deferred prosecution agreement and an accompanying statement of facts,

Scheme participants directed the victims to wire money through Western Union to help their relative or claim their prize. Various Western Union agents were complicit, taking a cut of of the money transfer, prosecutors said.

Western Union, which is based in Englewood, Colorado, knew of, but failed to take corrective action against its agents involved in or facilitating ,fraud-related transactions, the Justice Department said in a statement.

Prosecutors said the company failed to fire or discipline agents who ,repeatedly violated federal law and Western Union policy through their illegal activity in the Central District of California, which includes Los Angeles, Orange, Ventura, Santa Barbara and San Luis Obispo counties, and elsewhere.

The FBI and other agencies found that Shen Zhou International in Monterey Park sent more than $310 million in Western Union transactions to China — about 50 percent of which were structured to avoid federal money reporting regulations, prosecutors said.

The owner of Shen Zhou — Zhihe “Frank” Wang, 60, of Monterey Park — pleaded guilty in 2013 to one count of structuring international transactions to evade reporting requirement in Santa Ana federal court.

Wang admitted making numerous transmission to China in $2,500 increments, which is just below the $3,000 amount that triggers various reporting and record-keeping requirements for money transmitters.

Western Union had policies against that, but took no disciplinary action against Shen Zhou beyond one 90-day probation in January 2006 during which Shen Zhou continued to process transactions, according to the Justice Department.

“This settlement should go a long way in thwarting the proceeds of illicit transactions being sent to China to fund human smuggling or drug trafficking, as well as to interrupt the ease with which scam artists flout U.S. banking regulations in schemes devised to defraud vulnerable Americans,” said Deirdre Fike, the assistant director in charge of the FBI’s Los Angeles field office.
 

Former Montebello Lawmaker Pleads Guilty to Money Laundering

June 6, 2016 by · Leave a Comment 

Former Democratic Assemblyman Tom Calderon pleaded guilty Monday to a federal money laundering charge in a corruption case that also involves his brother, former state Sen. Ron Calderon.

Tom Calderon admitted before U.S. District Judge Christina Snyder that he helped conceal bribe money his brother was receiving from undercover agents working for the FBI.

“Guilty, your honor,” the former assemblyman said when prompted by the judge in the near-empty downtown Los Angeles courtroom.

Defense attorney Shepard Kopp said outside court that the agreement did not call for his client to testify against his brother. Federal prosecutors made no comment after the hearing.

Snyder scheduled a Sept. 12 sentencing hearing. The plea is expected to result in reduced prison time of no more than a year, fines, a period of supervised release and the dismissal of other charges.

The Calderon brothers were indicted on two-dozen counts, including wire fraud, mail fraud, honest services fraud, bribery concerning programs receiving federal funds, conspiracy to commit money laundering, money laundering, and aiding in the filing of false tax returns.

Ron Calderon – whose trial is set for July 19 – is accused of accepting $80,000 in bribes, as well as gourmet meals and golf outings, from a medical company owner and an undercover FBI agent posing as a film executive.

He was suspended from the state Senate in March 2014, and his term in office ended nine months later.

Tom Calderon represented his Montebello-area district in the California Assembly from 1998-2002.

According to the plea agreement signed today, Tom Calderon allowed $30,000 from an undercover agent to be funneled through his Calderon Group as payment for his lawmaker brother to support lowering the threshold for California’s film tax credit from $1 million to $750,000.

Tom Calderon deposited the $30,000 into the company’s bank account and then wrote a check for $9,000 to Ron Calderon’s daughter, according to prosecutors.

“Defendant conducted these financial transactions in order to conceal and disguise the fact that the money represented the proceeds of bribery,” the document states.

Updated 6:27 p.m.

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