Western Union and MoneyGram found their companies mentioned a number of times in the Legends Sports Book indictment. The mentions were not flattering and are sure to create internal discussions within both companies and US law enforcement about their business model.
Cash transfer services are dinosaurs in a day and age where electronic banking is easily accessible to anyone in developed countries. These services also create a difficult situation for US law enforcement when it comes to tracking transfers and customers. These services make it easier to evade the Patriot Act and related banking “know your customer” laws. Regardless of how you feel about those laws they exist and are going to be enforced.
Feds Monitor Cash Transfer Services
Cash transfers are the most popular deposit method for online gambling websites for US players. Many have assumed these transactions were relatively anonymous. The Legends indictment makes it clear that the feds are watching. Four transactions were identified with dates. Two other sections describe how accounts are funded and how insiders move money using cash transfers.
Section 91 of the Legends indictment mentions:
These transfers were in the form of cash, wire transfers, personal and business checks, cashier’s checks, credit cards, Western Union wires, MoneyGrams and money orders.
Section 92 of the indictment states:
It was further part of the conspiracy that, upon establishing a gambling account with Legendz Sports, defendants offered the client numerous methods to find such gambling accounts, including, but not limited to, credit cards, debit cards, “MoneyGrams”, and Western Union wire transfers.
Western Union and MoneyGram Scams
Many people will agree that online gambling is rather harmless. Most people that send money to an online sports book or poker room know they may lose their money. At least they will receive a fair chance of winning if they make their bets or play their cards right. Even if you feel that online gambling is a legitimate use of cash transfer services, there are many Western Union and MoneyGram uses that serve no legitimate purpose. Many are just outright scams.
Both companies warn their customers on their websites about how scammers use their services. The long list of scams include romance, lottery, sweepstakes, relatives in trouble, internet purchases, overpayment and check scams. Social media sites such as Craigslist also warn their visitors of these types of scams.
There is also the touchy subject of migrant workers sending money back home. Some have accused Western Union of targeting and exploiting these workers.
Few Legitimate Uses for Cash Transfers Today
There are few legitimate uses for cash transfer services today. All developed nations have some banking system that is set up for electronic transfers. These transactions are often cheaper than sending cash by Western Union or MoneyGram and more convenient for senders that are not flushed with cash. Arguably, many of those that have so much cash in their pocket that choose Western Union or MoneyGram over a bank transfer are at the very least using this service to avoid paying taxes on their cash earned. These senders would otherwise choose a less expensive bank or ewallet transfer.
There are certainly legitimate uses for these types of transactions but many are easily replaced. One legitimate service cash transfers offer is bill pay. This service could easily be replaced by banks, supermarkets and check cashing stores. In fact, many of these companies already offer bill pay services for far less than companies like Western Union and MoneyGram charge. Prepaid debit cards and online ewallets have also replaced many legitimate cash transfer services before the digital age. Receivers too poor to open a bank account can still receive a prepaid debit card for far cheaper than it costs to send a cash transfer in most countries.
There are people in some countries without a banking system that could not receive cash any other way. This narrow use could be the only reason the US Government has not yet cracked down on cash transfer businesses when so many illegitimate uses are apparent.
I am not encouraging law enforcement to step up its investigations into cash transfers. I simply feel that cracking down on cash transfers is inevitable or at least more restrictions will be placed on them. As long as money going overseas or gambled online is wrongfully connected to terrorism by US lawmakers and authorities then those out to fight it will continue their grip on the US banking system.
Cash transfer services will likely die as countries move away from paper currency and move to a cashless, electronic system. Western Union and MoneyGram may not still be alive in the US when that day happens.How many more times will Western Union and MoneyGram be mentioned in an indictment before the US Government decides that their business model serves no legitimate purpose?