Former MoneyGram Executive To Pay Record Personal Fine To Settle Money Laundering Accusations

Image courtesy of Mike Mozart

The former compliance officer for money transfer company MoneyGram must pay $250,000 — the largest such fine imposed — to settle allegations that he personally failed to stop consumers from becoming victims of fraud.

The settlement, announced by the Financial Crimes Enforcement Network and U.S. Attorney of the Southern District of New York, resolves a 2014 lawsuit against Thomas Haider, who worked as the compliance office for MoneyGram from 2003 to 2008.

FinCEN and the U.S. Attorney’s office had originally sought a $1 million civil pearly against Haider, claiming he structured an ineffective anti-money laundering program and failed to close MoneyGram locations that were suspected of being involved in fraud.

The agencies claimed that these actions were in violation of the Bank Secrecy Act, which requires financial firms to try to prevent money laundering.

Thursday’s fine marks the largest FinCEN has imposed on an individual.

As part of his settlement, Haider took responsibility for his part in failing to prevent money laundering and agreed to not seek a similar job for three years.

“Compliance professionals occupy unique positions of trust in our financial system,” FinCEN said in a statement. “When that trust is broken, it is important that we take action… Holding him personally accountable strengthens the compliance profession by demonstrating that behavior like this is not tolerated within the ranks of compliance professionals.”

This isn’t the first time MoneyGram has been tied to consumer fraud. In Feb. 2016, 49 attorneys general and the District of Columbia announced a deal in which MoneyGram agreed to revamp its policies and provide $13 million in restitution to consumers who were harmed by fraudsters using the service.

The agreement settled an investigation into complaints from consumers who used the company’s wire transfer service to send money to third parties involved in schemes aimed at defrauding people.

According to the settlement, the states’ investigation centered on complaints from consumers who were contacted by phone, mail, or the Internet by the operators of several different schemes, including the grandparent scheme, foreign lottery, romance scam, and employment and business opportunity scams.