SWAMPSCOTT — It was shortly after 8 on a mid-October morning when Vivian Mandell’s cellphone rang. She was rushing out the door, on her way to her appointment at the beauty salon, but decided to answer the call.
At that moment she didn’t realize she was about to become one of the hundreds of thousands of Americans who fall victim to financial scams each year. But unlike most of those victims, Mandell eventually became one of the few who will get her money back.
The person on the phone identified himself as Mandell’s grandson, and although she didn’t think it sounded like him, she kept listening. “He said, ‘I’m in trouble. You need to help me but don’t tell anybody, because I want to tell the family.’ He said he was in an accident and he needed money,” she said.
By then, Mandell’s heart was racing, and another voice on the phone was giving her instructions. The man idenified himself as Frank, her grandson’s attorney. He told her that her grandson had been in a car accident, needed $2,500 in order to have the charges dropped, and that the money needed to be sent as soon as possible by wire transfer to the Dominican Republic. He instructed her to drive to a Walmart and transfer the funds by MoneyGram.
Within minutes, Mandell was standing in front of a bank teller, withdrawing $2,500 as quickly as she could. “I told her it was an emergency,” she said.
Mandell, who grew up in Lynn and is now in her mid 80s, drove to the Walmart in Lynn and rushed to the MoneyGram center, where she wired the $2,500 to the man in the Dominican Republic. She then drove home and was unsuccessful in her attempts to reach her son and grandson, who live in California. Around 4 p.m., her cellphone rang and it was Frank on the line again. The judge, said Frank, would let her grandson out of the driving under the influence charge if she would send another $2,800.
“I couldn’t wait to run down to the bank; I didn’t want to see him go to jail. I even ran a red light,” she said, taking note that she had cleared out her life savings in one day. Returning to Walmart, she wired an additional $2,800 to the same address.
When she arrived home, she sat down at her kitchen table and got a feeling that something wasn’t right. That’s when her phone rang. It was her grandson on the line, who told her that he was fine.
Sitting in her living room, Mandell began to grasp the fiscal and emotional impact of the scam. With her life savings gone, her children sought to have the money returned to her by Walmart and MoneyGram. Mandell, who reported the fraud to the Swampscott police, was told there was little chance she could get it back.
MoneyGram is the second largest money transfer company in the world, and in the last decade it has been rocked by an internal theft scandal, which was settled earlier this month. According to a Department of Justice statement, the company agreed to forfeit $100 million and admitted “to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money-laundering program.”
Court documents revealed that from 2004 to 2009, MoneyGram violated US law “by processing thousands of transactions for MoneyGram agents known to be involved in an international scheme to defraud members of the US public. MoneyGram profited from the scheme by collecting fees and other revenues on the fraudulent transactions.”
The Department of Justice identified one scheme where scammers targeted the elderly, posing as victims’ relatives in urgent need of money. It has been widely called the “Grandma scam.”
The $100 million fine follows a 2009 ruling in which the Federal Trade Commission fined MoneyGram $18 million over similar consumer complaints. That fine also ordered the company to properly train and monitor its agents, and fire or suspend any agent who does not take appropriate steps to stop fraudulent money transfers.
After the Globe contacted MoneyGram, the company conducted a four-day investigation regarding Mandell’s money transfers. “When we learned about this situation, we immediately conducted a thorough investigation. We confirmed the MoneyGram compliance systems did not fail; the breakdown occurred at the point of sale,” said Patty Sullivan, a MoneyGram spokeswoman. “MoneyGram has addressed this with our agent and additional training will be provided. As a result, the victim’s money will be refunded by Walmart and MoneyGram.”
For elderly victims of fraud who don’t get the same results, the road toward filing charges is filled with stop signs. Grant Woodman, a spokesman for Martha Coakley, said the attorney general issues scam advisories warning the elderly about fraud but does not prosecute or track the scams. Continued...