The Attorney General for the State of Missouri announced last week the establishment of a new, national fund to assist and repay victims of Moneygram scams. The fraudulent wire transfer scams occurred between January 2004 and August 2009. According to the announcement:
"MoneyGram International, Inc. (MoneyGram), a global money services business, has agreed to forfeit $100 million to the United States as part of an agreement with the Justice Department. The agreement arose from a case involving approximately 25 MoneyGram agents allegedly carrying out wire scams..."
The fraudsters operated several versions of scams, often targeting senior citizens. Some of the scams involved promises of large cash prizes, shopping discounts, or employment opportunities as a "secret shopper" to trick unsuspecting consumers into transferring money. Another version of the scam involved a bogus story where a relative was stranded in another country, in need an immediate cash.
The Missouri Attorney General's Office will send letters to consumers who filed complaints about the MoneyGram scam. the letters describe the process for victims to receive a share of the forfeited payment. If you were a victim of the scam and did not file a complaint, you may still be eligible. If you believe you were a victim during the above period, contact the Missouri Attorney General's Office at 800-392-8222. All claims must be submitted by November 15, 2013.
For more information about the claims process, see http://www.justice.gov/criminal/vns/caseup/moneygram.html. The Justice Department's Victim Asset Recovery Program will review claims and determine payment on a case-by-case basis. The amount victims will receive will be determined after all claims have been processed.
The Oregon Attorney General, made a similar announcement in September 2013 about a settlement with Moneygram.
Sadly, this is not the first time Moneygram has been involved in scams. In 2008, The State of Maryland Attorney General announced an agreement between Moneygram and attorney generals in 43 states for alleged wire transfers to fraudulent marketers. The 2008 announcement:
"... MoneyGram will, among other things, fund a $1.1 million national consumer awareness program and set out very prominent consumer warnings on the forms used by consumers to wire money. MoneyGram, based in Minneapolis, offers money transfer services by wire... The problem addressed by the Agreement is the high number of “fraud-induced transfers” – money wired by consumers to fraudulent telemarketers and other scam artists. For example, some telemarketers, often based in other countries, use a “lottery” scam, in which they tell vulnerable consumers they have won a large sum of money but must pay taxes or other charges in order to claim the winnings..."
The Texas and Vermont attorney generals made similar announcements about the 2008 settlement. And, the U.S. Justice Department announced in November 2012:
"MoneyGram International Inc... has agreed to forfeit $100 million and enter into a deferred prosecution agreement (DPA) with the Justice Department in which it admits to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program, as charged in an information filed today in the Middle District of Pennsylvania."
In that 2012 announcement, Assistant Attorney General Breuer said:
“MoneyGram’s broken corporate culture led the company to privilege profits over everything else... MoneyGram knowingly turned a blind eye to scam artists and money launderers who used the company to perpetrate fraudulent schemes targeting the elderly and other vulnerable victims."
It sounds to me like the corporate culture is still broken. How much is enough? While the fines help victim recover stolen money, they clearly aren't enough. Send corporate executives to prison. That will put a quick stop this garbage.
Readers of this blog know that Moneygram is key vendor behind Walmart Money Centers, which offer a variety of banking services including money transfers, credit cards, prepaid cards, and gift cards. Knowing this history, I would not buy any money transfers at a Walmart Money Center. Would you?
Experts advise consumers to never wire money to a stranger. Transferring money via wire services is the same as cash. Call or contact the supposed family member in distress first, to verify the story.