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The Boston Globe

Business

MoneyGram sets up fund to settle fraud claims

DALLAS — MoneyGram said Friday that it has agreed to set up a $100 million compensation fund as part of a settlement of government allegations of fraud through money transfer scams from 2003 to 2009.

Under the terms of the deal with the US attorney’s office for the Middle District of Pennsylvania and the Department of Justice, Dallas-based MoneyGram International Inc. said it has also taken other steps to prevent more scams.

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These include adding more investigators and beefing up technology to detect fraud.

The payment services provider said it has terminated relationships with the agents suspected of masterminding the fraud.

It said it has also overhauled its corporate compliance program and has begun a new training program for agents to better sniff out and report scams.

The company previously set aside the money to compensate victims.

‘‘The conduct described in the (settlement agreement) is unacceptable to MoneyGram and counter to everything we strive to stand for,’’ said Pamela H. Patsley, chairman and chief executive, in a statement.

‘‘We take compliance very seriously at MoneyGram, and nothing angers us more than when our services are used to perpetrate illegal activity.’’

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