Fraudsters process $125 million through MoneyGram, DPA violated
15 Nov 2018

Criminals shifted over $100 million through cash transfer giant MoneyGram, causing it to violate a government deal aimed at beefing up its security.

According to the US Department of Justice, MoneyGram has now agreed to forfeit $125 million, the amount of consumer fraud transactions it processed just over a couple of years ago.

The transactions resulted in the firm violating its deferred prosecution agreement (DPA), which was reached in 2012.

Under the DPA, the state agreed to defer prosecution for five years provided Moneygram adhered to a number of financial crime compliance conditions.

The government, however, found MoneyGram had violated the deal, or deferred prosecution agreement (DPA).

“During the course of the DPA, MoneyGram experienced significant weaknesses in its AML and anti-fraud program, inadequately disclosed these weaknesses to the government, and failed to complete all of the DPA’s required enhanced compliance undertakings,” the Department of Justice said.

“As a result of its failures, MoneyGram processed at least $125 million in additional consumer fraud transactions between April 2015 and October 2016.”

The 2012 DPA was reached after MoneyGram was accused of involvement in fraud scams perpetrated by its agents and others, where they contacted victims, who included elderly and vulnerable people, and falsely posed as their relatives in urgent need of money or falsely promised large cash prizes, amongst other hooks.

The corrupt agents and perpetrators then asked victims to send funds through MoneyGram’s money transfer system.

On Thursday, the DoJ said it would continue the DPA, extending it for a period of 30 months, ‘after which time the government would seek to dismiss charges if MoneyGram has complied with the agreement.’

In a statement, MoneyGram said it “continues to cooperate with the DOJ and [Federal Trade Commission] FTC and is committed to complying with all applicable laws, regulations and standards in each of the markets and jurisdictions in which it operates.”

– Irene Madongo

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