U.S. Postal Inspection Service Seal




Contact: Postal Inspector-Team Leader Nick Alicea
Phone: (717) 257-2335
Email: nmalicea@uspis.gov

AUGUST 19, 2014


"The postman always rings twice" is the title of a movie that has nothing to do with the mail. Today, it's Postal Inspectors who are ringing twice, this time delivering 3,440 refund checks totaling more than $14 million to fraud victims. The restitution ranges from several hundred dollars to more than $249,000 for one victim in California.

This marks the second wave of reimbursement checks delivered to victims of a scam involving MoneyGram. According to the U.S. Department of Justice, MoneyGram was involved in an international, mass-marketing fraud perpetrated by corrupt MoneyGram agents and others who defrauded tens of thousands of victims in the United States. The case was prosecuted by the U.S. Attorney's Office of the Middle District of Pennsylvania and the U.S. Department of Justice, Asset Forfeiture and Money Laundering Section.

In December 2013, Postal Inspectors coordinated the disbursement of $46 million to more than 18,000 consumers victimized by MoneyGram. The disbursement includes remission to 149 Pennsylvania petitioners totaling more than $500,000. More than $3 million in total was disbursed to 1,087 Pennsylvania petitioners.

"Many of the 18,000 scam victims lost thousands and thousands of dollars, placing them and their families in dire straits," said David Bosch, Postal Inspector in Charge of the Philadelphia Division, which investigated MoneyGram. "Returning their money, which most victims thought was gone forever, is an opportunity to provide justice to victims in a tangible way."

As part of the scam, MoneyGram agents collected fees and other revenue from fraudulent transactions that induced people to send money via MoneyGram; for instance, to purportedly help a relative in urgent need of money, or to access a large (non-existent) cash prize.

MoneyGram reached a settlement with federal authorities and agreed to pay $100 million to victims of its consumer fraud that occurred between 2004 and 2009.

Consumers can learn more about how to protect themselves against fraud at postalinspectors.uspis.gov or DeliveringTrust.com. Customers should call 1-877-876-2455 to report suspected fraud.

The MoneyGram Scheme According to court documents, starting in 2004 and continuing until 2009, MoneyGram violated U.S. law by processing thousands of transactions for MoneyGram agents known to be involved in an international scheme to defraud members of the U.S. public. MoneyGram profited from the scheme by collecting fees and other revenues on the fraudulent transactions.

The scams--which generally targeted the elderly and other vulnerable groups--had agents posing as victims' relatives in urgent need of money and falsely promising large cash prizes, high-ticket items for sale online at deeply discounted prices, or employment opportunities as "secret shoppers." In each case, perpetrators required victims to send funds through MoneyGram's money transfer system.

The lottery sweepstakes and business opportunity schemes (secret shoppers) were conducted primarily via the U.S. Mail. The schemes contained a solicitation letter accompanied by a counterfeit check that victims were to deposit to their bank account. Victims were then instructed to wire funds via MoneyGram to agents in the United States and Canada who were controlled by fraudulent, mass-marketing operators. The victims never received what they were promised, and banks returned their checks as counterfeit.

Despite customer complaints and fraud data collected internally by the company, MoneyGram failed to shut down agents it knew were involved in the scams. In some instances, MoneyGram rewarded corrupt agents by granting them additional outlets and increasing their compensation. As a result, reported instances of fraud in the United States and Canada grew from 1,575 in 2004, to 63,814 instances of fraud-induced money transfers by 2009, totaling more than $100 million.

Postal Inspectors continue to coordinate global security initiatives with foreign postal administrations and law enforcement partners. In 2012 and 2013, Inspectors seized and destroyed nearly 2.8 million fraudulent foreign lottery mailings at U.S. borders, preventing thousands of American customers from becoming victims of fraud. During that same two-year period, Postal Inspectors seized 136,000 counterfeit postal money orders worth nearly $131 million mailed to the United States from criminal groups overseas.

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About the U.S. Postal Inspection Service:  The U.S. Postal Inspection Service is one of the oldest federal law enforcement agencies in the country. For more than 200 years, Postal Inspectors have protected the U.S. Postal Service, secured the nation’s mail system and ensured public trust in the mail. postalinspectors.uspis.gov