Global payments company reaches $34 million settlement with OFAC

On April 29, 2021, the US Department of the Treasury’s Office of Foreign Assets Control announced a $34 million settlement that was reached with MoneyGram Payment Systems Inc., a Dallas-based global payment processing company, to resolve allegations related to 359 apparent violations of various sanctions programs, including services provided to blocked individuals in US federal prisons, transactions processed on behalf of a blocked person, and processing commercial transactions involving Syria for two individuals.  While MoneyGram should have known that the transactions were prohibited from reviewing payment details and statements from customers, the company chose to process the transactions due to screening missteps and a failure to understand its legal obligations. However, OFAC decided to reduce MoneyGram's civil penalty after finding that its conduct was non-egregious and was voluntarily self-disclosed.

OFAC reports that MoneyGram processed transactions for the Federal Bureau of Prisons (BOP) between 2013 and 2015 without screening the inmates against OFAC’s List of Specially Designated Nationals and Blocked Persons list (SDN List), under the mistaken assumption that screening wasn’t required under the BOP program.  Once a screening program was implemented, additional prohibited transactions occurred due to human error and technological failures. In total, between 2013 and 2020, MoneyGram processed 359 transactions totaling more than $105,000 on behalf of approximately 40 individuals on the SDN List, and two individuals who engaged in commercial transactions involving Syria.

Since the apparent violations were discovered, MoneyGram made several enhancements to its compliance program including the launch of a new system that screens and monitors sanctions and other compliance-related factors for all BOP-related transactions, significantly increased its investment in the compliance program by adding 128 new employees to the compliance department, and by offering additional training to improve the quality of data collected by its agents.  As part of its settlement with OFAC, MoneyGram has agreed to maintain these and other compliance commitments.

Department of Treasury Recent Actions | OFAC Enforcement Release

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