A Texas money transfer company has pleaded guilty to federal charges that it failed to adequately maintain an anti-money laundering (AML) program, letting $167 million move overseas without oversight.
According to the U.S. Department of Justice, Ping Express pleaded guilty to that charge earlier this month and now faces five years probation and a fine of up to $500,000.
Three people, including two of Ping’s major customers, have already pleaded guilty to transmitting illegally gotten funds using the company’s service.
One person, Collins Orogun, has admitted to accepting a free in exchange for transferring funds for scammers. Among these fraudsters were men who preyed on women online, forging romantic relationships and then asking for money to help with emergencies.
As PYMNTS reported earlier this year, these types of scams are on the rise, according to a study by Scotland’s TSB Bank and reports from the FBI and Federal Trade Commission (FTC). In many cases, victims are losing thousands of dollars, or even their life savings.
Romance fraud jumped by 91% during COVID-19, TSB found, with the average victim getting cheated out of an estimated $8,300. The fake relationships lasted an average of 62 days, with the longest one lasting nearly three years.
Ping CEO Anslem Oshionebo and Ping COO Opeyemi Odeyale have also pleaded guilty to failure to maintain an effective anti-money laundering program and were sentenced to 27 months in prison, the Justice Department said.
Aleoghena Okhumale, the company’s IT and business development manager, was sentenced to 42 months in prison after admitting to knowingly transmitting illegally-derived funds, the department said.
Meanwhile, Ping itself pleaded guilty to failing to file a single suspicious transaction report — which it was required by law to do — over a three-year period, despite many questionable transfers. While the company told state regulators it had an AML policy, the company admitted it allowed more than 1,500 customers to violate these rules.
In addition, Ping pleaded guilty to carrying out money transmissions in states where it wasn’t licensed to do so.
