MoneyGram admits to fraud, fund laundering

Nov. 9, 2012 at 3:21 PM
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DALLAS, Nov. 9 (UPI) -- MoneyGram International, a Dallas global money services business, admitted to money-laundering and wire fraud violations, the U.S. Justice Department said.

MoneyGram agreed to forfeit $100 million and enter into a deferred prosecution agreement with the Justice Department, admitting to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program, the Justice Department said Friday in a release.

"MoneyGram's broken corporate culture led the company to privilege profits over everything else," said Assistant Attorney General Lanny Breuer. "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."

MoneyGram must retain a corporate monitor who will report regularly to the Justice Department for the next five years, Breuer said.

Court documents indicated MoneyGram, from 2004 until 2009, processing thousands of transactions for its agents who were known to be involved in an international scheme to defraud the public. MoneyGram profited by collecting fees and other money on the fraudulent transactions.

The scams generally targeted the elderly and other vulnerable groups and required the victims to send funds through Money Gram's money transfer system, the Justice Department said. The scams included posing as victims' relatives needing money fast, promising large cash prizes, offering expensive items for sale on the Internet at steeply discounted prices or employment opportunities as "secret shoppers."

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