Delaware | 1-31950 | 16-1690064 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||
2828 N. Harwood Street, 15th Floor Dallas, Texas | 75201 | |||
(Address of principal executive offices) | (Zip code) |
Not applicable |
(Former name or former address, if changed since last report) |
Exhibit No. | Description of Exhibit |
10.1 | |
10.2 | |
10.3 | |
99.1 |
MONEYGRAM INTERNATIONAL, INC. | ||
By: | /s/ F. Aaron Henry | |
Name: | F. Aaron Henry | |
Title: | General Counsel and Corporate Secretary |
Exhibit No. | Description of Exhibit |
10.1 | |
10.2 | |
10.3 | |
99.1 |
Date: November 8, 2012 | By: | /s/ Pamela H. Patsley |
Pamela H. Patsley | ||
Chairman and Chief Executive Officer | ||
MoneyGram International, Inc. |
Date: November 8, 2012 | By: | /s/ John K. Villa |
John K. Villa | ||
David M. Zinn | ||
Williams & Connolly LLP |
Date: November 9, 2012 | By: | /s/ Kim D. Daniel |
Kim D. Daniel | ||
Assistant United States Attorney |
Date: November 8, 2012 | By: | /s/ Craig M. Timm |
Craig M. Timm | ||
Trial Attorney | ||
Asset Forfeiture and Money Laundering Section |
By: | /s/ Pamela H. Patsley |
Pamela H. Patsley | |
Chairman and Chief Executive Officer | |
MoneyGram International, Inc. |
Date: | November 8, 2012 |
By: | /s/ John K. Villa |
John K. Villa | |
David M. Zinn | |
Williams & Connolly LLP | |
Counsel for MoneyGram International, Inc. |
UNITED STATES OF AMERICA, v. MONEYGRAM INTERNATIONAL, INC., Defendant. | Case No. 1:12-cr-291 | |
Date: | November 7, 2018 | By: | /s/ W. Alexander Holmes | |
W. Alexander Holmes | ||||
Chief Executive Officer | ||||
MoneyGram International, Inc. | ||||
Date: | November 7, 2018 | /s/ David M. Zinn | ||
David M. Zinn | ||||
Williams & Connolly LLP | ||||
Date: | November 8, 2018 | By: | /s/ Kim Douglas Daniel | |
Kim Douglas Daniel | ||||
Assistant U.S. Attorney | ||||
Date: | November 8, 2018 | By: | /s/ Margaret A. Moeser | |
Margaret A. Moeser | ||||
Senior Trial Attorney | ||||
FEDERAL TRADE COMMISSION, | Civil Action No. 09-cv-6576 |
Plaintiff, | |
v. | |
MONEYGRAM INTERNATIONAL, INC., | |
Defendant. |
A. | “Cash-to-Cash Money Transfer” means the transfer of the value of cash from one Person in one location to a recipient (payee) in another location that is received in the form of cash. |
B. | “Cash Reload Money Transfer” means the transfer of the value of cash from one Person in one location to a recipient (payee) in another location that is received in a form that makes it possible for a Person to convert the cash into an electronic form that can be used to add funds to a general-use prepaid card or an account with a payment intermediary. |
C. | “Consumer” means any Person, worldwide, unless otherwise stated, who initiates or sends a Money Transfer. |
D. | “Consumer Fraud” means any fraud or deception involving Fraud-Induced-Money-Transfers. |
E. | “Defendant” means MoneyGram International, Inc., its subsidiaries and affiliates, and its successors and assigns. |
F. | “Elevated Fraud Countries” means any country in which the principal amount of Money Transfers that are the subject of fraud complaints, received by Defendant from any source, represents one (1) percent or more of the principal amount of fraud complaints worldwide received by Defendant, for Money Transfers either sent or received in that country, determined on a quarterly basis, provided that once a country is determined to be one of the Elevated Fraud Countries, it shall continue to be treated as such for purposes of this Order. |
G. | “Elevated Fraud Risk Agent Location” means any MoneyGram Agent location that has processed payouts of Money Transfers associated with: |
1. | Five (5) or more fraud complaints for such agent location, received by Defendant from any source, during the previous sixty (60) day period, based on a review of complaints on a monthly basis; and fraud complaints, received by Defendant from any source, totaling five (5) percent or more of the total payouts for such agent location in numbers or dollars in a sixty (60) day period, calculated on a monthly basis; or |
H. | “Fraud-Induced Money Transfer” includes any Money Transfer that was induced by, initiated, or sent as a result of, unfair or deceptive acts or practices and/or deceptive or abusive Telemarketing acts or practices. |
I. | “Front Line Employee” means the employee or associate of the MoneyGram Agent responsible for handling a transaction at the point of sale for a Consumer or a recipient (payee) of a Money Transfer, including by initiating, sending, or paying out the Money Transfer. |
J. | “MoneyGram Agent” means any network agent, chain agent, master agent, seller, correspondent, authorized delegate, standard agent, independent agent, retail agent, super agent, hybrid agent, subagent, sub-representative, or any location, worldwide, authorized by Defendant to offer or provide any of its Money Transfer products or services. |
K. | “Money Transfer” means the sending of money (in cash or any other form, unless otherwise stated) between a Consumer in one location to a recipient (payee) in another location using Defendant’s money transfer service, and shall include transfers initiated or sent in person, online, over the telephone, using a mobile app, at a kiosk, or through whatever platform or means made available, and money transfers received at a kiosk or ATM machine. The term “Money Transfer” does not include Defendant’s payment services available to Persons to pay bills or make payments, such as Defendant’s urgent or utility bill payment services, and Defendant’s pre-paid services for items such as pre-paid cards or cellular phones. |
L. | “Person” includes a natural person, an organization or other legal entity, including a corporation, partnership, sole proprietorship, limited liability company, association, cooperative, or any other group or combination acting as an entity. |
M. | “Seller” means any Person who, in connection with a Telemarketing transaction, provides, offers to provide, or arranges for others to provide goods or services in exchange for consideration. |
N. | “Telemarketer” means any Person who, in connection with Telemarketing, initiates or receives telephone calls to or from a customer. |
O. | “Telemarketing” means any plan, program, or campaign which is conducted to induce the purchase of goods or services by use of one or more telephones, and which involves a telephone call, whether or not covered by the TSR. |
P. | “Unusual or Suspicious Money Transfer Activity” means Money Transfer activity that cannot reasonably be explained or justified, including, but not limited to, the following: |
A. | Transmitting a Money Transfer that Defendant knows or should know is a Fraud-Induced Money Transfer, or paying out a Money Transfer to any Person that Defendant knows or should know is using its system to obtain funds from a Consumer, directly or indirectly, as a result of fraud; |
B. | Providing substantial assistance or support to any Seller or Telemarketer that Defendant knows or should know is accepting from a U.S. Consumer, directly or indirectly, a Money Transfer as payment for goods or services offered or sold through Telemarketing; |
C. | Failing to do any of the following in connection with Money Transfers initiated by Consumers: |
1. | Interdict recipients that have been the subject of any complaints about Fraud-Induced Money Transfers based on information provided to, or that becomes known by, Defendant; |
D. | Failing to reimburse the principal amount of a Consumer’s Money Transfer and any associated Money Transfer fees whenever a Consumer or his or her authorized representative reasonably claims that the transfer was fraudulently induced and: |
E. | Failing to promptly provide information to a Consumer, or his or her authorized representative, who reports being a victim of fraud to Defendant, about the name of the recipient of the Consumer’s Money Transfer and the location where it was paid out, when such information is reasonably requested; and |
F. | Failing to establish and implement, and thereafter maintain, a comprehensive anti-fraud program that is designed to protect Consumers by detecting and preventing Fraud-Induced Money Transfers worldwide, and to avoid installing or doing business with agents who appear to be involved or complicit in processing Fraud-Induced Money Transfers or who fail to comply with Defendant’s policies and procedures to detect and prevent fraud (hereinafter referred to as “Defendant’s Anti-Fraud Program” or “Program”). To satisfy this requirement, Defendant must, at a minimum: |
i. | To the extent permitted by law, requiring all Persons to provide a government-issued identification document (ID) in order to receive a Money Transfer through a MoneyGram Agent; |
ii. | Establishing certain dollar thresholds for Money Transfers to Elevated Fraud Countries and holding Money Transfers exceeding such dollar thresholds to Elevated Fraud Countries until Defendant has confirmed with the sender that they are not Fraud-Induced Money Transfers or has refunded the money to the sender; and |
iii. | Ensuring that MoneyGram Agent locations are recording all required information about recipients required by Defendant’s policies or |
A. | Failing to conduct thorough due diligence on all Persons applying to become, or renewing their contracts as, MoneyGram Agents, including any sub-representative or subagent, to avoid installing |
B. | Failing to reject applications where Defendant becomes aware or should have become aware based upon its due diligence that the applicant, or any of the applicant’s sub-representatives or subagents, presents a material risk of becoming an Elevated Fraud Risk Agent Location; |
C. | Failing to ensure that the written agreements entered into with all new MoneyGram Agents require them to comply with Section I.C.2 of this Order; |
D. | Failing to ensure that all new MoneyGram Agents have effective policies and procedures in place at each of the agent’s locations to detect and prevent Fraud-Induced Money Transfers and other acts or practices that violate Section I of this Order; |
E. | Failing to confirm that MoneyGram Agents whose contracts are up for renewal are complying with the terms of their agreements with Defendant, including, but not limited to, by having effective policies and procedures in place to detect and prevent Fraud-Induced Money Transfers; and |
F. | Failing to require all new MoneyGram Agents, and existing MoneyGram Agents, to: (i) disclose and update the identities of any sub-representative or subagent; and (ii) direct their subagents or sub-representatives to maintain records on the identities of their Front Line Employees. |
A. | Failing to provide ongoing education and training on Consumer Fraud for all MoneyGram Agents, Front Line Employees, and other appropriate MoneyGram personnel, including, but not limited to, education and training on detecting, investigating, preventing, reporting, and otherwise handling suspicious transactions and Fraud-Induced Money Transfers, and ensuring that all MoneyGram Agents and Front Line Employees are notified of their obligations to comply with Defendant’s |
B. | Failing to monitor and investigate MoneyGram Agent location activity to detect and prevent Fraud-Induced Money Transfers, including, but not limited to: |
1. | Developing, implementing, adequately staffing, and continuously operating and maintaining a system to receive and retain all complaints and data received from any source, anywhere in the world, involving alleged Fraud-Induced Money Transfers, and taking steps necessary to obtain, record, retain, and make easily accessible to Defendant and, upon request, the FTC, all relevant information regarding all complaints related to alleged Fraud-Induced Money Transfers, including, but not limited to: |
c. | The reference number for each Money Transfer related to the complaint; |
2. | Taking steps to identify MoneyGram Agents and Front Line Employees involved or complicit in fraud, including, at a minimum, by conducting the reviews and analyses set forth in Subsections B.4 and 5 of this Section; |
3. | Routinely reviewing and analyzing data regarding the activities of MoneyGram Agent locations in order to identify the following: |
C. | Failing to take at least the following actions to prevent further Fraud-Induced Money Transfers: |
D. | Failing to establish anti-fraud controls to ensure that, prior to paying out Money Transfers, MoneyGram Agent locations are recording all required information about the recipients of Money Transfers, including, but not limited to, the recipients’ names, addresses, telephone numbers, and identifications, and are verifying the identification presented by the recipients or, for Money Transfers that are directed to bank accounts, are recording the identities of the account holders. |
A. | For Money Transfers that are not transferred directly into a recipient’s bank account, photocopy or scan the identification documents or biometric information presented by the recipient and retain the photocopies or images, along with the receive forms, for a period of five (5) years; and |
B. | Demonstrate during compliance reviews or mystery shops, which Defendant shall conduct on at least a quarterly basis, that the agent location is complying with the requirements in this Section; |
A. | When Defendant is contacted with a complaint about alleged fraudulent activity associated with a Money Transfer, provide notice to the Consumer, or his or her authorized representative, that (i) Defendant’s practice is to share information regarding the Consumer’s Money Transfer and complaint with law enforcement, including a database used by law enforcement authorities in the United States and other countries; and (ii) if the Consumer does not want his or her name, address, telephone number, and identification shared with law enforcement, Defendant will honor that request unless applicable law permits or requires Defendant to provide that information; and |
B. | Regularly, but no less often than every thirty (30) days, submit electronically to the FTC, or its designated agent, for inclusion in Consumer Sentinel, all relevant information Defendant possesses regarding complaints received from Consumers, their authorized representatives, or any other source, anywhere worldwide, about alleged Fraud-Induced Money Transfers and regarding the underlying transfer itself, including, but not limited to, the information set forth in Section III.B.1.a through III.B.1.l. Provided, however, if Defendant receives a request from a Consumer or the Consumer’s authorized representative, which is documented by Defendant, stating that the Consumer does not want his or her name, address, telephone number, and identification shared with the database, or if Defendant received the complaint from a source other than the Consumer or the Consumer’s authorized representative, Defendant shall submit to the FTC an anonymized complaint with the Consumer’s name, address, telephone number, and identification redacted. |
A. | Judgment in the amount of One Hundred Twenty-Five Million Dollars ($125,000,000) is entered in favor of the Commission against Defendant as equitable monetary relief for consumer redress. |
B. | Defendant shall satisfy the judgment in Subsection A of this Section by complying with the payment requirements set forth in Paragraphs 10 and 11 of the DPA Amendment filed in United States v. MoneyGram International, Inc., 12 CR-00291 (M.D. Pa.). |
C. | Defendant relinquishes dominion and all legal and equitable right, title, and interest in all assets transferred pursuant to this Order and Paragraphs 10 and 11 of the DPA Amendment and may not seek the return of any assets; |
D. | The facts alleged in the Complaint and Unopposed Motion will be taken as true, without further proof, in any subsequent civil litigation by or on behalf of the Commission, including in a proceeding to enforce its rights to any payment or monetary judgment pursuant to this Order, such as a nondischargeability complaint in any bankruptcy case; |
E. | The facts alleged in the Complaint and Unopposed Motion establish all elements necessary to sustain an action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes; |
F. | Defendant acknowledges that its Employer Identification Number, which Defendant must submit to the Commission, may be used for collecting and reporting on any delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701; |
G. | All money paid pursuant to this Order and Paragraphs 10 and 11 of the DPA Amendment shall be deposited into the DOJ or the Department of the Treasury Assets Forfeiture Funds. The funds shall be administered by the FTC and DOJ to compensate the fraud victims described in the FTC’s Unopposed Motion and the DOJ’s and Defendant’s Joint Motion to Extend and Amend the DPA (Docket No. __). Defendant has no right to challenge any actions taken by DOJ, the FTC, or their representatives, pursuant to this Subsection; and |
H. | No asset transfer required by this Order should be deemed, or deemed in lieu of, a fine, penalty, forfeiture, or punitive assessment. Defendant’s satisfaction of the judgment through a payment pursuant to the DPA Amendment is not intended to alter the remedial nature of the judgment. |
A. | Defendant, within seven (7) days of entry of this Order, must submit to the Commission an acknowledgment of receipt of this Order sworn under penalty of perjury; |
B. | For ten (10) years after entry of this Order, Defendant must deliver, or cause to be delivered, by electronic or other means a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all employees, agents, and representatives who participate in conduct related to the subject matter of this Order, including, but not limited to, MoneyGram Agents and employees who are involved in any way with Consumer Fraud complaints or who are involved in the hiring, training, or monitoring of MoneyGram Agents; and (3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting. Defendant must send a copy of this Order to current personnel within fourteen (14) days of entry of this Order. For all others, delivery must occur before they assume their responsibilities; and |
C. | From each individual or entity to which a Defendant delivered a copy of this Order, Defendant must obtain, within thirty (30) days, a signed and dated acknowledgment of receipt of this Order. Provided that, in the event that Defendant is unable to secure such acknowledgements from all current MoneyGram Agents, despite notice of this requirement, Defendant shall retain proof of distribution of this Order to all current MoneyGram Agents, such as an electronic mail receipt, a certified mail receipt, or an affidavit of service. |
A. | One (1) year after entry of this Order, Defendant must submit a compliance report, sworn under the penalty of perjury by a senior corporate manager, or a senior officer responsible for Defendant’s Anti-Fraud Program, based on personal knowledge or knowledge gained from company officials or subject matter experts with requisite knowledge, that: |
1. | Identifies the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Commission may use to communicate with Defendant; |
2. | Identifies any business entity that Defendant has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order; |
3. | Describes in detail whether and how Defendant is in compliance with each Section of this Order, including, but not limited to, describing the following: |
a. | The number of MoneyGram Agents, by country, identified by the procedures in Section III.B.3 of this Order; |
b. | The names, addresses, and telephone numbers of all MoneyGram Agent locations that have been suspended, restricted, or terminated by Defendant for reasons related to Fraud-Induced Money Transfers, the dates of and the specific reasons for the suspensions, restrictions, or terminations, and, for MoneyGram Agents that have been reactivated after suspension, the dates of the reactivations; and |
c. | Evidence showing that Defendant has and is complying with the requirements of Sections I through V of this Order; |
4. | Indicates that Defendant is not aware of any material noncompliance that has not been (1) corrected or (2) disclosed to the Commission; and |
5. | Includes a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously submitted to the Commission. |
B. | Annually, unless otherwise stated in this Subsection, for a period of twelve (12) years after Defendant’s submission of the compliance report required by Subsection A of this section, Defendant shall submit a compliance report, sworn under penalty of perjury by a senior corporate manager, or a senior officer responsible for Defendant’s Anti-Fraud Program, based on personal knowledge or knowledge gained from company officials or subject matter experts with requisite knowledge, that: |
1. | Notifies the Commission of any change in any designated point of contact within fourteen (14) days of the change; |
2. | Notifies the Commission of any change in the structure of any entity that Defendant has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order, within fourteen (14) days of the change; |
3. | Describes in detail whether and how Defendant is in compliance with each Section of this Order, including, but not limited to, describing the following: |
a. | The number of MoneyGram Agents, by country, identified by the procedures in Section III.B.3 of this Order; |
b. | The names, addresses, and telephone numbers of all MoneyGram Agents that have been suspended, restricted, or terminated by Defendant for reasons related to Fraud-Induced Money Transfers, the dates of and the specific reasons for the suspensions, restrictions, or terminations, and, for MoneyGram Agents that have been reactivated after suspension, the dates of the reactivations; |
c. | Evidence showing that Defendant has and is complying with the requirements of Sections I through V of this Order; and |
4. | Indicates that Defendant is not aware of any material noncompliance that has not been (1) corrected or (2) disclosed to the Commission. |
C. | Defendant must submit to the Commission notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against Defendant within fourteen (14) days of its filing; |
D. | Any submission to the Commission required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I declare under penalty of perjury under the laws of the United States of America that the foregoing is true |
E. | Unless otherwise directed by a Commission representative in writing, all submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: FTC v. MoneyGram, X___________. |
A. | Defendant’s current written programs and policies governing the detection and prevention of Consumer Fraud and the installation and oversight of its agents, including, but not limited to, its Anti-Fraud Program; |
B. | Defendant’s current policies and procedures governing Consumer Fraud education or training provided to MoneyGram Agents or other appropriate personnel; |
C. | All MoneyGram Agent applications, records reflecting due diligence conducted by Defendant with respect to such applications, and with respect to agents whose contracts come up for renewal, and written agreements entered into with MoneyGram Agents; |
D. | Records of all complaints and refund requests, whether received directly or indirectly, such as through a third party, from any source, anywhere in the world, about potentially Fraud-Induced Money Transfers, and any response, including, but not limited to, the information listed in Section III.B.1 of this Order; |
E. | Records reflecting all steps Defendant has taken to monitor the activity of its agents to detect, reduce, and prevent Consumer Fraud, including, but not limited to, records of Defendant’s reviews, audits, or investigations of MoneyGram Agents associated with Consumer Fraud, communications with such agents regarding Consumer Fraud matters, and any remedial action taken against agents due to fraud; |
F. | Copies of documents relating to compliance reviews or mystery shops conducted by Defendant of Elevated Fraud Risk Agent Locations pursuant to Section IV of this Order; and |
G. | All records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Commission. |
A. | Within fourteen (14) days of receipt of a written request from a representative of the Commission, Defendant must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; appear for depositions; and produce documents for inspection and copying. The Commission is also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69; |
B. | For matters concerning this Order, the Commission is authorized to communicate directly with Defendant. Defendant must permit representatives of the Commission to interview any employee or other Person affiliated with Defendant who has agreed to such an interview. The Person interviewed may have counsel present; and |
C. | The Commission may use all other lawful means, including posing, through its representatives as Consumers, suppliers, or other individuals or entities, to Defendant or any individual or entity |
/s/ Karen D. Dodge | Dated: November 8, 2018 |
/s/ W. Alexander Holmes | Dated: November 6, 2018 |
/s/ David M. Zinn | Dated: November 6, 2018 |
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