14 DAY TRIAL // Earlier this month, money transfer company MoneyGram agreed to forfeit a total of $100 million (80 million EUR). The organization has entered a deferred prosecution agreement with the US Department of Justice (DoJ) after it admitted that, for several years, it had allowed criminals to commit wire fraud.
According to the DoJ, MoneyGram was involved in all sorts of malicious schemes, some of which even operated by the company’s own agents. Furthermore, they failed to maintain an effective anti-money laundering program and knowingly allowed fraudsters to use their services.
Court documents reveal that between 2004 and 2009, MoneyGram processed thousands of transactions for agents that were known to be involved in an international fraud scheme.
The scammers promised victims all sorts of fabulous prizes and employment opportunities in return for relatively small payments.
Despite the fact that thousands of complaints were filed by victims, the agents in question were not terminated. In 2008, in US and Canada, there were close to 20,000 instances of fraud reported by customers.
MoneyGram has agreed to clean up its act and implement serious changes, including the adoption of a worldwide anti-fraud and anti-money laundering standard, to avoid future incidents.
Furthermore, the company has agreed to retain an independent monitor who will regularly report back to the DoJ.
“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,” Assistant Attorney General Breuer explained.
“In addition to forfeiting $100 million, which will be used to compensate victims, MoneyGram must for the next five years retain a corporate monitor who will report regularly to the Justice Department.”
As security journalist Brian Krebs emphasizes, because of the lack of proper anti-fraud mechanisms, companies such as MoneyGram aid fraudsters in making impressive amounts of money by stealing from small businesses. Hopefully, the new systems they’re implementing will take this into consideration.