What seemed like a never-ending legal battle for MoneyGram International has finally drawn to a close. On Thursday, 10th of June 2021, Judge Christopher Conner of the U.S District Court in Harrisburg approved the anti-money laundering compliance program of the company, bringing to a close an eight-year-long settlement agreement.
How it started…
The history of MoneyGram’s legal battles began in 2004. According to court documents, MoneyGram was said to have been turning a blind eye to fraudulent transactions being engaged in by its U.S and Canada agents, costing consumers millions of dollars.
Between April-October 2016, the company failed to flag and report a $125 million transaction, and this inaction flaunted the terms of the DPA. It was stated that the company willfully failed to put effective checks in place in its anti-money laundering program. At the court hearing, the judge fined the company $125 million and extended the DPA till May 2021.
How it is going…
MoneyGram has implemented the highest consumer-data collection capabilities in the industry and its customer ID verification standards, technology platforms and data-driven controls have helped to bring consumer fraud rates to all-time lows, ” – MoneyGram’s spokesman.
Five years down the line, the anti-money laundering charges against MoneyGram have been dismissed, as the company has been said to comply with the terms of the settlement agreement. MoneyGram’s agreement, which was supposed to last for 4 years, was extended seven times, thereby forcing the company to forfeit $225 million in total.
The court dismissed the charges after an independent monitor, John Carey certified that the company had “reasonably designed and implemented” a satisfactory compliance program.
Furthermore, the prosecutors of the case stated that the company had also paid the fines which were imposed on it. Through the money forfeited, the victims of the scams that occurred in 2004-2009 and 2013-2017 were duly compensated.
The company has learned a huge lesson and this is evident in the improvements in its compliance program over the last few years, some of which include the introduction of new point-of-sale technology and identity verification requirements.
While MoneyGram faced huge losses as a result of the legal settlement, their case will always serve as a deterrent to other financial institutions and force them to keep their organizational policies in check.
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