The check is in the mail for more than 3,000 victims of a scam involving Money Gram that has angered area authorities.
The Post Office announced that it is delivering 3,440 checks totaling more than $14 million to victims across the county – a second wave of restitution checks that range from several hundred dollars to more than $249,000. In December 2013, postal inspectors coordinated the disbursement of $46 million to more than 18,000 consumers who were victims of the MoneyGram fraud. Today’s disbursement includes remission to 149 Pennsylvania petitioners totaling more than $500,000, bringing the total Pennsylvania compensation to more than $3 million, the release said.
According to the U.S. Department of Justice, MoneyGram was involved in international mass marketing consumer fraud schemes, perpetrated by corrupt MoneyGram agents and others, that defrauded tens of thousands of victims, many of them elderly and/or infirm.
“Many of the 18,000 scam victims lost thousands and thousands of dollars through this scam, putting them and their families in dire straits,” said David Bosch, Postal Inspector in Charge of the agency that investigated MoneyGram. “Returning their money, which most victims thought was gone forever, is an opportunity to provide justice to the victims in a very tangible way.”
As part of the scam, MoneyGram collected fees and other revenues from fraudulent transactions that were part of scams that got people to send money using MoneyGram, under guises such as helping a relative in urgent need of money or accessing a large cash prize or business opportunity.
MoneyGram reached a settlement with federal authorities and agreed to pay $100 million to victims of the consumer fraud scams that occurred between 2004 and 2009.
The lottery sweepstakes and business opportunity schemes (secret shoppers) were conducted primarily via U.S. Mail. The schemes contained a solicitation letter accompanied by a counterfeit check that victims were instructed to deposit to their respective bank account. Victims were then instructed to wire funds via the MoneyGram money transfer system to agents in the United States and Canada who were controlled by the fraudulent mass marketing operators. The victims never received what they were promised and the banks returned the checks as counterfeit.
Despite consumer complaints as well as fraud data collected internally by the company, MoneyGram failed to shut down agents that it knew were involved in the scams. In some instances, MoneyGram rewarded the corrupt agents by granting them additional outlets and increasing their compensation. As a result, fraudulent activity grew from 1,575 reported instances of fraud by customers in the United States and Canada in 2004 to a total of 63,814 instances of fraud-induced money transfers by 2009, totaling over $100 million, the release said.
Consumers can learn more about how to protect themselves against fraud at www.postalinspectors.uspis.gov and at www.deliveringtrust.com. Customers should call (877) 876-2455 to report suspected frauds.
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