* Payment ends decade-long probe
* Hundreds of millions channeled illegally to Mexico
* Western Union shares close down 1.7 pct (Adds details of settlement, other states)
NEW YORK, Feb 11 (Reuters) - Western Union Co (WU.N) has agreed to pay $94 million to resolve a decade-long probe into alleged illegal money laundering into Mexico involving the company’s money transfers.
“This is a major step in our ability to crack down on drug cartels and organized border crime,” said Arizona Attorney General Terry Goddard, whose state led the investigation, in a statement. “Attacking the flow of illicit funds from the United States to smuggling cartels in Mexico is fundamental to our goal of crushing the cartels.”
The attorneys general of California, New Mexico and Texas — Jerry Brown, Gary King and Greg Abbott — were involved in the settlement.
The accord reflects the company’s commitment to ensuring that its services “are not abused by those engaged in criminal activity and to enhancing the fight against illegal activity along the U.S.-Mexico border,” Western Union said.
The settlement calls for Western Union to provide $50 million to set up and fund a Southwest Border Anti-Money Laundering Alliance, which will help law enforcement in the four border states prosecute money laundering, weapons smuggling and related criminal activity.
Western Union will invest $19 million to upgrade its anti-money laundering program, provide $4 million for monitoring and pay $21 million to cover the costs of the Arizona probe.
Federal investigators believe $18 billion to $39 billion is smuggled to Mexico from the United States annually, Brown said.
Western Union is based in Englewood, Colorado. Its shares closed Thursday down 28 cents at $16.16 on the New York Stock Exchange. (Reporting by Jonathan Stempel, editing by Leslie Gevirtz and Robert MacMillan)