NEW YORK/ST. LOUIS (Reuters) - U.S. authorities sued MoneyGram International Inc’s former chief compliance officer on Thursday, seeking a $1 million civil penalty and to hold him personally responsible for failing to stop fraudulent telemarketers from using the money-transfer firm’s services.
The lawsuit against Thomas Haider was filed in U.S. District Court in Manhattan and appeared to be the first time the federal government has sued an individual executive for compliance failures related to money laundering. The lawsuit was unprecedented, said one of Haider’s attorneys, Ian Comisky.
The U.S. Justice Department and the U.S. Treasury said in a statement that under Haider, MoneyGram failed to put in place an effective anti-money laundering program and failed to file timely suspicious activity reports with law enforcement. Haider left MoneyGram in 2008.
The failures were violations of the Bank Secrecy Act, a 1970 U.S. law that requires financial firms to try to prevent money laundering, the statement said.
Haider believes the allegations are unfounded, his lawyers said, adding that the lawsuit would have a chilling effect on compliance officers at U.S. financial institutions.
“While the current government mantra is for heightened individual responsibility, this is the wrong case to try to establish this principle,” Comisky said in a statement.
Jennifer Shasky Calvery, director of the Treasury’s Financial Crimes Enforcement Network, said Haider’s failures were an affront to the compliance profession. “His inaction led to personal savings lost and dreams ruined for thousands of victims,” she said in a statement.
In addition to seeking the $1 million penalty, the lawsuit seeks to bar Haider from participating directly or indirectly in the affairs of any financial institution in the United States, according to the statement.
MoneyGram spokeswoman Michelle Buckalew said in a statement that since Haider left the company, its management, organizational structure and programs have changed significantly. She said the company would not comment on ongoing litigation.
MoneyGram, which is based in Dallas, agreed in 2012 to forfeit $100 million to the U.S. government for its failures to prevent money laundering.