The Federal Trade Commission (FTC) announced on Thursday, November 8, that MoneyGram will pay US$125 million in penalties after having violated a six-year-old settlement tied to anti-money laundering (AML) controls. According to the FTC, the company violated the settlement struck in 2012 that stemmed from charges that the company had aided and abetted wire fraud.
After the terms of the settlement were announced, the Financial Times (FT) reported that the company failed to prevent “at least US$125 million” in fraudulent transactions from being completed between April 2015 and October 2016. Court documents stated that the revised fraud prevention system that was put in place after the settlement was ineffective. MoneyGram said the fraud that winnowed its way through its agent network was due to “external circumstances,” reported the FT.
The Thursday announcement from the FTC stated that the company’s computerized monitoring system—aimed at blocking known fraudsters from using its service—“malfunctioned for an 18-month period in 2015 and 2016. During that time, MoneyGram failed to block individuals that the company knew, or should have known, were using its service for fraud or to obtain fraud-induced money transfers.”
Against this backdrop, the FTC stated MoneyGram is paying the US$125 million, and that a deferred prosecution agreement with the Department of Justice (DOJ) has been extended to May 2021.
MoneyGram also settled with the FTC—which had claimed Mo
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