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Saturday, December 9, 2023
Courthouse News Service
Saturday, December 9, 2023 | Back issues
Courthouse News Service Courthouse News Service

Moneygram Must Pay $100 Million for Fraud

DALLAS (CN) - Moneygram will pay $100 million to settle a Department of Justice investigation of fraudulent wire transfers involving its agents in the United States and Canada.

The Dallas-based wire transfer company entered a deferred prosecution agreement on Nov. 8, it said in a press statement.

"The company has agreed to the appointment of an independent compliance monitor and a forfeiture of $100 million that will be available to victims of the consumer fraud scams perpetrated through Moneygram agents," Moneygram said in the statement.

Moneygram's statement did not describe the nature of the fraud, but Reuters reported that it involved Moneygram agents tricking people into wiring them money by posing as relatives in trouble, or promising cash prizes.

The federal investigation also involved its fraud complaint data and consumer antifraud program from 2003 to 2009.

CEO Pamela H. Patsley said in the statement that the conduct alleged is "unacceptable" and against "everything we strive to stand for."

"We take compliance very seriously at MoneyGram, and nothing angers us more than when our services are used to perpetrate illegal activity," Patsley said in a statement. "Since 2009, we've created a new culture at the company and have taken numerous steps to enhance our global compliance and anti-fraud programs."

Patsley says the company has invested more than $84 million in its compliance programs.

Moneygram said it has fired those involved in the alleged fraud, cooperated with law enforcement and implemented a training program to teach agents how to detect, report and stop suspicious transactions.

The company says it has created two new executive-level positions to fight consumer fraud and paid an additional $18 million to victims in 2009 to settle similar claims by the Federal Trade Commission.

Shares of Moneygram closed Friday at $13.93, about 40 percent lower than a year ago. The $100 million settlement caused Moneygram to post a $54.8 million loss in the third quarter, Reuters reported.

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