Scam Alert: Beware of the Moneygram scheme

Posted at 7:25 PM, Feb 06, 2014
and last updated 2014-02-06 19:25:11-05

Scammers around the world used Moneygram as a way to get a hold of their victim's cash.

The scammers and the wire service made a fortune until the federal government stepped in and held Moneygram accountable.

“One morning, I answered the phone and this young fella said 'Hi Grandma,’” says Wanda Wood, a fraud victim.

Wood says the voice sounded like her grandson, Matt. She became concerned when he said he was in Canada and needed help: $4,500 wired to him immediately.

“I really and truly thought it was Matt. The kid sounded like him,” says Wood.

She wired the money via Moneygram, but con artists intercepted it along with funds sent by hundreds of others who were targeted in the scheme.

“I was really disappointed. There I was out of $4,500,” says Wood.

The justice department found Moneygram in violation of processing thousands of transactions for individuals known to be involved in scams.

“The corrupt agents converted the money transfers to cash in a manner that maintained the anonymity of fraudsters,” says Nick Alicea, a US Postal Inspector.

Moneygram profited from the scheme by collecting fees and other revenues on the fraudulent transactions.

Schemes included the grandparent scam that lured in Wanda, as well as secret shopper scams and sweepstakes or lottery scams.

Don Golden`s mother lost $60,000 and came close to losing her home.

“She decided that she didn`t have the money to pay her school taxes because she was putting all of her money in this sweepstakes activity,” says Golden.

Moneygram has agreed to pay 100 million dollars for its role in the scam between 2004 and 2009.

“This in my mind is a milestone day because we are seeing some justice for my mother and my family,” says Golden.

Postal inspectors will distribute $46 million dollars to almost 18,000 victims or family members of scam victims across the country.

Victims are grateful but their experience has taken its toll.

“It will never give back what I`ve been through because it tore my world apart, it really did,” says Karen Luther, a victim.

Anyone who believes they may have been victimized by the Moneygram scheme is urged to visit for instructions on how to file a request for compensation.