Conciliatory Notes: MoneyGram funds reimbursement checks for Lower Bucks fraud victims

By Jack Firneno
Wire Editor

Good news: your grandson’s not in jail, and the post office is sending you a check.

Starting last week, some residents of Lower Bucks County are receiving reimbursement funds courtesy of the U.S. Attorney’s Office, the U.S. Department of Justice, the U.S. Post Office and the money transfer company MoneyGram. They’re going out to people in the area — many of them senior citizens — who were duped into wiring thousands of dollars to con artists.

The cons would draw them in by convincing the marks they’d won the lottery, entered a sweepstakes or selected for a work-at-home opportunity. But, they’d have to send some money in order to receive their payout.

And, in a ruse that’s rising in popularity, a con artist calls a senior citizen in the middle of the night. They pose as his or her grandson and ask them to wire bail money or funds to fix a broken-down car far from home.

“There are a lot of different ways they prey on you,” said Postal Inspector Team Leader Nick Alicea. “The number-one bellringer is the lottery sweepstakes, but the grandparents [scam] has definitely elevated itself in prominence.”

This is the second wave of payments to victims after a round last December. Now, postal inspectors are delivering 3,440 checks nationwide, totaling more than $14 million.

Locally, this translates to $47,317 for 14 people in Lower Bucks County and Huntington Valley, Abington and Hatboro in Montgomery County. In nearby Philadelphia, 18 people will receive $35,768.

The scam works like this: a mark, often an elderly person, is contacted by a con artist and convinced to wire money using the service MoneyGram. Often, they do so by delivering a check and telling the mark to cash it before sending in a fraction of that amount for taxes on winnings, or to cover start-up funds for a work-at-home business.

Once the money is wired, the fraudster then gives a corrupt MoneyGram agent at the receiving location the reference number for the transfer. The agents pull the money from the system themselves and put phony information into MoneyGram’s tracking systems to hide their tracks.

Then, after taking a cut, the agent sends the rest of the money to the fraudster in charge. It’s a worldwide phenomenon: most cons are traced back to Canada, Romania, Nigeria, Spain or Jamaica.

“We’ve been working on these cases for the last five or six years. They’re elaborate conspiracies,” said Alicea.

In fact, what made these scams unique — and why victims were able to get reimbursed — was knowledge within MoneyGram that the fraud was taking place.

“MoneyGram paid out because they were aware of what was happening but did nothing about it,” explained Alicea. “Fraud reports would build up but they wouldn’t shut the agents down.”

Agents are people who open a MoneyGram booth in a supermarket, for instance, or a mom-and-pop store. But along with ignoring the complaints, Moneygram would increase the compensation and expand the outlets for corrupt agents as they did more business.

The agents are considered independent contractors, and so while several have been arrested, none of the company’s actual employees are facing charges, Alicea said.

But, that doesn’t mean there aren’t consequences: MoneyGram is paying out $100 million to victims of scams from 2004 and 2009, and agreed to put monitoring systems in place to prevent abuse within their system.

Those measures include better training for MoneyGram contractors.

“If you see an 86-year-old woman coming in wanting to wire $5,000, you need to ask questions,” said Alicea.

The Post Office became involved when it received complaints about solicitations coming through the mail. Or, a check would arrive for them to cash, once they were on the hook. They’d be told to deposit the check, then wire some money back to the fraudster for some reason: taxes on a lottery or sweepstakes winnings, for instance.

“Within a day or two, they’re withdrawing and sending to the bad guys,” said Alicea, but it could take up to two weeks to discover that the check they’d cashed to cover those funds was counterfeit.

To prevent more people from being victimized, the Post Office intercepts as many of these mailings as possible. Between only 2012 and 2013, postal inspectors seized almost 2.8 million fraudulent lottery mailings and 136,000 counterfeit money orders mailed from other countries.

“We’ve been working these cases over the last five or six years,” said Alicea. “When we started, it was the lotteries, then work-at-home or advance-fee scams. What’s disturbing now is the grandparents scams, when people send $4,000 or $5,000.”