Western Union appeals Arizona's money transfer seizures

By Chris Rizo | Jul 25, 2008

Terry Goddard (D)

PHEONIX, Ariz. (Legal Newsline)-Western Union on Friday asked the Arizona Supreme Court to review a lower court's decision that allows the state to seize money transfers to Mexico.

The case deals with money sent from states other than Arizona to Sonora, Mexico, which officials believe is going to human smuggling rings and other criminal operations.

An attorney for Englewood, Colo.-based Western Union said the case has "important constitutional issues" for the high court to consider.

"We support and endorse the State of Arizona's law enforcement goals. We are also concerned about the constitutional rights of people to undertake ordinary financial transactions without unreasonable government interference," said David Schlapbach, Western Union general counsel and executive vice president.

The Western Union appeal stems from 2006, when Arizona Attorney General Terry Goddard issued a warrant seeking to seize all Western Union wire transfers over $500 sent from 28 states to locations in Sonora, Mexico.

Western Union said it was able to get the warrant stayed in Arizona State Court. In 2007, a trial court ruled the wire seizures were invalid and enjoined the attorney general from similar actions in the future.

Then in July, the Arizona Court of Appeals overruled the trial court, and Western Union appealed to the Supreme Court.

In an earlier interview, Goddard touted the success the state had in using special warrants to go after wire transfers to immigrant smugglers, known as cyotes.

Arizona was able to intercept and seize $20 million in smuggling fees, the Democrat said, noting that five years ago about $600 million flowed into the Grand Canyon State through wire transfers, while today it's "virtually nothing."

"We had some temporary success in disrupting their way of payment, but that has been replaced by triangulation," where the family of a person being smuggled into the United States wires the coyotes' fee to somebody in Mexico and they then phone to tell the smuggler that the money has been received.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.

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