MoneyGram is a money transmitter frequently used by individuals to conduct various day-to-day financial transactions, such as paying routine bills, or sending money to family members overseas. A recent investigation conducted by the NYDFS revealed that MoneyGram agents were involved in a widespread money laundering scheme, including six small, store-front agents in New York, that defrauded thousands of people out of over $100 million. After noticing a spike in transactions with China, many of which involved identical recipients of funds, the NYDFS initiated a 17-month long investigation. During the investigation, over 25,000 transactions with China occurred, totaling over $100,000 in transferred funds.
The findings of the investigation boiled down to a failure of MoneyGram to properly oversee the activities of the six New York agents who were involved in these suspicious transactions, in violation of New York law and the Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”). Subsequently, MoneyGram terminated its relationship with the agents, and worked to reach a settlement with NYDFS.
On March 16, 2022, a press release from Superintendent of Financial Services Adrienne Harris revealed that in addition to entering into a deferred prosecution agreement (DPA) with the Department of Justice (DOJ) for processing transactions for its own agents who were known to be engaged in widespread money laundering, MoneyGram has agreed to the pay $8.25 million. MoneyGram also stated that it has invested $800 million in compliance technology, agent oversight, and training programs, and as of May 2021, has received approval of its new compliance measures.