A Court of Appeals ruling has dealt the Arizona Attorney General’s office a setback, but "clears the way for us to move forward to combat smuggling organizations in Arizona," Attorney General Terry Goddard said.
The panel unanimously ruled Sept. 11 that a 2006 order by Goddard’s office for records held by Western Union to assist investigations into the smuggling of illegal immigrants is too broad and does not show a clear connection to Arizona.
Although the court rejected the wide scope of the subpoena, it also shot down Western Union’s claims that Goddard's subpoena power is limited to investigating individual criminal incidents and that his office has no right to probe wire transfers occurring entirely outside of Arizona.
In April of 2006, Goddard’s office demanded records of transactions amounting to $300 or more received by the company’s offices in Sonora, Mexico, in an effort to combat money laundering by criminal drug and human smuggling rings.
According to an affidavit filed by the Financial Crimes Task Force, an interagency clique formed to cut the flow of smuggling profits, smugglers resorted to wiring funds directly to Sonora after law enforcement successfully identified Western Union agents in Arizona routinely used by traffickers.
Records voluntarily surrendered by Western Union for March and April of 2005, showed $28 million was sent to Sonora in the span. Approximately $19 million of that amount was wired to just 18 company agents in five border cities “well known to law enforcement as staging areas for smugglers,” according to the court’s opinion.
Although the appeals panel agreed Goddard demonstrated a “discrete portion” of data sought from may have a connection to racketeering in the state, it found enforcing the demand for records sent to Sonora from anywhere in the world would force Western Union to produce records unrelated to Arizona.
“Such a broad request for information, on its face, demonstrates no connection with Arizona and the information sought,” wrote Presiding Judge Murray Snow, reciting a declaration by Western Union.
“The subpoena makes no effort to limit its scope to particular receiving agents or persons, location of origin of the wire-transfer, or indicia of illegality.” In a written statement issued after the opinion, Goddard acknowledged his office “ventured into new legal territory,” but said he was “pleased” the court recognized both Sonoran money laundering and the authority of the Attorney General to subpoena records from Western Union to combat the crime.
“Although this ruling will delay our investigations somewhat, it clears the way for us to move forward to combat smuggling organizations in Arizona,” Goddard said.
Sherry Johnson, a Western Union spokeswoman, said the she could not comment on “ongoing litigation” or speculate on the possibility of facing more narrowly defined subpoenas from the Arizona Attorney General.
“We’re pleased the Arizona Court of Appeals seems to have recognized the limitations on the Attorney General’s authority to examine consumers’ personal information,” said Johnson.
“We’re very hopeful we can continue working with the Attorney General’s Office to resolve this matter in a way that meets their law enforcement demands while protecting the rights of our consumers.”
The case number is CA-CV 06-0700.