Former MoneyGram compliance chief penalized $1 million for ‘willful inaction’
Monday, December 22, 2014 at 7:08AM
Richard L. Cassin in Compliance Officer, Due Diligence, FinCEN, Fraud, Ian Comisky, Jennifer Shasky Calvery, MoneyGram International Inc., Preet Bharara, Thomas E. Haider, money laundering

The Treasury Department's Financial Crimes Enforcement Network (FinCEN) imposed a $1 million civil penalty against the former chief compliance officer for MoneyGram International Inc.

Thomas E. Haider failed to ensure that his company complied with the anti-money laundering (AML) provisions of the Bank Secrecy Act, FinCEN said.

FinCEN also filed a complaint with the U.S. Attorney for Manhattan to enforce the penalty and bar Haider from working in the financial industry.

Haider ran MoneyGram's compliance program and fraud department from 2003 to 2008. During that time, MoneyGram "collected thousands of complaints from consumers who were victims of fraudulent schemes," FinCEN said.

The government said Haider could have stopped the fraud. U.S. Attorney Preet Bharara said Haider "allowed criminals to use MoneyGram to defraud innocent consumers and then launder the proceeds of their fraudulent schemes."

Scammers told victims by mail, email, and telephone calls that they'd won the lottery or been hired for a “secret shoppers” program. Others were duped to believe they'd been approved for a guaranteed loan or had won a cash prize, FinCEN said. Many victims were elderly.

The fraudsters convinced victims to use MoneyGram’s transfer system to send them up front taxes, customs duties, or processing fees.

In a 2012 federal settlement, MoneyGram paid $100 million to compensate fraud victims. The company admitted that it aided and abetted the fraud and failed to maintain an effective anti-money laundering program. A five-year deferred prosecution agreement required MoneyGram to retain an independent monitor who reports to the DOJ.

Dallas, Texas-based MoneyGram operates in more than 200 countries through a global network of about 339,000 agent offices. At least 25 former MoneyGram agents have been prosecuted by the U.S. Attorney in Pennsylvania.

FinCEN director Jennifer Shasky Calvery called Haider’s AML failures "an affront to his peers and to his profession."

"With his willful violations," she said, "he created an environment where fraud and money laundering thrived and dirty money rampaged through the very system he was charged with protecting."

Haider's inaction, Shasky Calvery said, "led to personal savings lost and dreams ruined for thousands of victims.”

Haider denies any wrongdoing. One of his lawyers, Ian Comisky, said, "While the current government mantra is for heightened individual responsibility, this is the wrong case to try to establish this principle."

Haider didn't file suspicious activity reports on agents he knew or suspected were engaged in fraud, money laundering, or other criminal activity, the DOJ said. And he failed to perform adequate due dilgence or audits or terminate known high-risk agents.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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