Confidential and Proprietary

Confidential and Proprietary

Conference of Western States Attorneys General

Law Enforcement Cooperation

Joseph Cachey IIIActing General CounselChief Compliance OfficerJuly 12, 2011

Confidential and Proprietary

Global Law Enforcement Partnerships

F.B.I - Federal Bureau of Investigation Immigration Customs and Enforcement Queensland Police Service – Australia Jamaican Police ConstabularyElectronic Financial Crimes Commission - Nigeria New Scotland Yard – United Kingdom United States Secret Service Serious Organized Crime Agency – United Kingdom Directorate for Combating Cyber Crime – Romania Department to Counter International Organized Crime – Romania New Zealand National Police Australian Federal Police Royal Canadian Mounted Police

F.B.I - Federal Bureau of Investigation Immigration Customs and Enforcement Queensland Police Service – Australia Jamaican Police ConstabularyElectronic Financial Crimes Commission - Nigeria New Scotland Yard – United Kingdom United States Secret Service Serious Organized Crime Agency – United Kingdom Directorate for Combating Cyber Crime – Romania Department to Counter International Organized Crime – Romania New Zealand National Police Australian Federal Police Royal Canadian Mounted Police

Australia: Security Awareness and Fraud Education (SAFE) Program Australia: Queensland Police U.K.: Operation ST£RLING Anti-Phishing Working Group U.S. Secret Service Electronic Crimes Task Force / Philadelphia U.S. Secret Service Electronic Crimes Special Agent Program Convention Project C.O.L.T. / Montreal Project Emptor / Vancouver Toronto Fraud Squad / Toronto Phone Busters / North Bay, Ontario Canadian Terrorist Task Force / Montreal U.S. Postal Inspection Service IRS DEA – Drug Enforcement Agency U.S. Department of Agriculture National Center for Missing and Exploited Children Advanced Fee Fraud Coalition IC3 – Internet Crime Complaint Center

Australia: Security Awareness and Fraud Education (SAFE) Program Australia: Queensland Police U.K.: Operation ST£RLING Anti-Phishing Working Group U.S. Secret Service Electronic Crimes Task Force / Philadelphia U.S. Secret Service Electronic Crimes Special Agent Program Convention Project C.O.L.T. / Montreal Project Emptor / Vancouver Toronto Fraud Squad / Toronto Phone Busters / North Bay, Ontario Canadian Terrorist Task Force / Montreal U.S. Postal Inspection Service IRS DEA – Drug Enforcement Agency U.S. Department of Agriculture National Center for Missing and Exploited Children Advanced Fee Fraud Coalition IC3 – Internet Crime Complaint Center

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From Cooperation to Indictment• Western Union assisted SOCA and the United Kingdom Border Agency (UKBA) with an investigation

of a gang of armed robbers which resulted in their arrest as they attempted to flee to Spain. LE was able to seize £275,000 cash and are currently in the process of seizing a house valued at 450,000 pounds and two vehicles, a Bently and Mercedes.

• As a result of information provided by Western Union, the U.S. Secret Service arrested 3 individuals in Austin, Texas who were responsible for approximately $1.5M in fraud related to the grandparents scam. The U.S. Secret Service also indicated our information helped in identifying a team of approximately 200 runners who were involved in picking up the money for the organization.

• Western Union provided court testimony in Los Angeles on a case against a habitual counterfeiter. We assisted the San Bernardino, California Sheriff's Department with this investigation involving numerous counterfeit WU Money Orders. The defendant was found guilty and sentenced to 16 years.

• Western Union is currently assisting the U.S. Secret Service and Romanian LE with a case involving consumer related fraud (eBay) were over $2M in potential fraud has been identified. The suspects are using fraudulent passports to receive and send money. approximately 1,000 runners have been identified. The expectation is approximately 40 individuals will be arrested. Last week we assisted the Georgia Office of Consumers Protection with the arrest of four individuals who are tied to the fraud case in Romania.

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Global Monitoring and Intelligence

Why maintain a global monitoring and intelligence function?

• Designed to be a central collection point for High Risk issues.

• Works in tandem with Field Compliance Officers to evaluate and mitigate AML risk.

• Maintains a broad investigative mandate.

• Works in concert to escalate high risk comprehensive suspicious activity reports to law enforcement.

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Evaluation & Analysis Reviews focus on four areas of risk:

Violation of AML laws (BSA) and/or Western Union policy violations Possible illicit activity related to money laundering, terrorist financing and fraud Agent or employee complicity

Investigation Components: Transaction Analysis Enhanced due diligence on consumers, Agent principals and/or front line associates Retrieval of court documents Hiring of private investigation firms Agent location observation Forms – Hand writing analysis and/or data validation Agent owner, front line associate and/or consumer interviews

Key Questions: Is there a reasonable explanation for the questionable consumer activity? Do we have a bad Agent, bad Agent employees, or bad consumer traffic? Is the Agent complicit, or are we faced with a training issue?

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CASE STUDIESWorking to partner with law enforcement

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Vietnam - eCurrency

Western Union received a referral from the Seattle, Washington United States Secret Service

(USSS) office regarding an individual who was allegedly involved in the selling of stolen

credit card information.

Between 1/1/2011 and 4/25/2011, Western Union identified approximately 4,100 senders, who sent approximately $6.5M to 240 receivers in Vietnam.

Small groups of payees received transactions from multiple senders worldwide, and a large concentration was being sent from the United States.

Three Agent locations in Vietnam were suspended pending further investigation.

Based on intelligence received from the USSS, the activity appeared to be related to the sale of stolen credit card information. In addition, this network of consumers appears to be layering the proceeds from the illicit activity through e-currency, facilitated by Liberty Reserve.

A comprehensive SAR was filed and referred to the Special Agent from the United States Secret Service who initially reached out to Western Union.

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Tijuana, Mexico – Prescription Drugs

Agent’s reviewed due to a high rate of suspicious consumer activity during a country review

of Mexico and at the same time the Agent also appeared as a top paying Agent for

transactions reported in Suspicious Activity Reports filed by Western Union.

Between 6/15/10 and 8/15/10, approximately 817 different senders from multiple U.S. states sent over 1,000 transactions totaling over $500,000 to 84 different payees primarily at six Agent locations in Tijuana.

Western Union was unable to identify a reasonable and/or consistent explanation for the above-mentioned activity from consumers interviewed during the course of the investigation.

During the course of a discussion with the Southwest Border Alliance, it was discovered that a consumer interviewed by the Department of Public Safety in Arizona, disclosed that she in fact was purchasing illegal prescription drugs.

The Southwest Border Alliance believes that while the funds are being paid in Mexico, they believe the drugs are shipped from China.

A comprehensive SAR was filed and referred to the United States Immigration and Customs Enforcement and the Southwest Border Alliance.

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Houston, Texas to Michoacán, Mexico Questionable Consumer Activity (QCA) involving large principal transactions sent from the

Houston area to Michoacán, Mexico.

Between 10/01/2010 and 4/1/2011 ~130 consumers in Houston sent 296 transactions totaling $1,936,056 to 219 payees primarily in Huetamo, Mexico.

Many of the senders provide common occupations such as “construction worker”, “waiter” or “car salesman”.

Senders provide multiple phone numbers, many are in their 20’s and have limited financial/public backgrounds

Payees and senders do not appear related

As Western Union blocked consumers related to this activity, new consumers consistently appear to take the place of blocked consumers.

A comprehensive SAR was filed and referred to an investigator with the Texas Attorney’s General Office.

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