Prepayment services firm MoneyGram International Inc. (MGI) has
reached a $100 million settlement tied to an investigation of
transactions involving certain of the company's U.S. and Canadian
agents, as well as its fraud-complaint data and consumer anti-fraud
program.
MoneyGram said it had entered into a deferred prosecution
agreement with the U.S. Attorney's Office for the Middle District
of Pennsylvania and the Asset Forfeiture and Money Laundering
Section of the Criminal Division of the Department of Justice.
Under the deal's terms, no further action will be taken against
MoneyGram if it meets the agreement's conditions.
MoneyGram has agreed to the appointment of an independent
compliance monitor and a forfeiture of $100 million that will be
available to victims of the consumer fraud scams perpetrated
through MoneyGram agents.
"The conduct described in the DPA's statement of facts is
unacceptable to MoneyGram and counter to everything we strive to
stand for," Chief Executive Pamela H. Patsley said. "We take
compliance very seriously at MoneyGram, and nothing angers us more
than when our services are used to perpetrate illegal
activity."
Ms. Patsley added that since 2009, Moneygram has "created a new
culture at the company and have taken numerous steps to enhance our
global compliance and anti-fraud programs."
The company had disclosed that it was in discussion with the
authorities about the investigation in previous filings. During the
second quarter, it made an accrual for $30 million. Friday, it said
it had made an additional accrual of $70 million in the third
quarter related to the matter.
Friday, MoneyGram also reported that it had swung to a
third-quarter loss as a rise total operating expenses outweighed
higher revenue.
Shares closed Thursday at $13.78 and were inactive in recent
premarket trading. The stock has dropped 33% in the past year.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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