FinCEN Assesses $1 Million Penalty and Seeks to Bar Former MoneyGram Executive from Financial Industry

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(12/18/2014) The Financial Crimes Enforcement Network (FinCEN) today issued a $1 million civil money penalty (CMP) against Mr. Thomas E. Haider for failing to ensure that his company abided by the anti-money laundering (AML) provisions of the Bank Secrecy Act (BSA). Concurrently, FinCEN’s representative, the U.S. Attorney’s Office for the Southern District of New York (SDNY), today filed a complaint in U.S. District Court that seeks to enforce the penalty and to enjoin Mr. Haider from employment in the financial industry. This CMP is the product of a joint investigation by FinCEN and the SDNY.

From 2003 to 2008, Mr. Haider was the Chief Compliance Officer for MoneyGram International Inc. Mr. Haider oversaw MoneyGram’s Fraud Department, which collected thousands of complaints from consumers who were victims of fraudulent schemes. Mr. Haider also headed MoneyGram’s AML Compliance Department, which was charged with ensuring compliance with requirements under the BSA designed to protect the financial system against money laundering and terrorist finance…

Mr. Haider was responsible for monitoring MoneyGram’s worldwide network of agents, and through the information he received from complaints to the Fraud Division, he could have suspended or terminated any agents that were participating in illicit activity. His inaction led to thousands of innocent individuals being duped out of millions of dollars through fraud schemes that funneled, and sometimes laundered, their illicit profits through MoneyGram’s money transmission network.

The schemes relied on a variety of tales and false promises aimed at misleading and persuading unsuspecting victims to send money through the participating MoneyGram agents and outlets. The often elderly victims were solicited through the mail, e-mail, and telephone, and told, among other things, that they had won a lottery, had been hired for a “secret shoppers” program, had been approved for a guaranteed loan, or had been selected to receive an expensive item or cash prize. The victims were told that to receive the item or winnings, they had to pay the perpetrators money in advance. For example, in situations where the victims were promised lottery winnings or cash prizes, they were told that they had to pay taxes, customs’ duties, or processing fees up front and were directed to send the advance payments to fictitious payees using MoneyGram’s money transfer system.

Mr. Haider also failed in his responsibility to ensure the filing of suspicious activity reports (SARs) on agents whom he knew or had reason to suspect were engaged in fraud, money laundering, or other criminal activity. By failing to file SARs, despite having extensive information regarding complicit MoneyGram outlets and the evident victimization of MoneyGram’s customers, he denied critical information to law enforcement which could have been used to combat the fraud and dismantle the criminal networks.