Texas led the charge on Thursday as it and 20 other U.S. states declared they were suing DE as a disagreement over uncashed money orders reached a fever pitch. The coalition is also asking the Court to order the appropriate repayment to plaintiff states by Delaware. He said the amount owed to the coalition is more than $150 million and could total as much as $400 million of unclaimed money for 49 states. The suit says that DE is wrongly forcing financial services firms that are incorporated in the state turn these funds over to Delaware.
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MoneyGram is incorporated in DE – just like more than half of all publicly traded companies in the USA, and about two-thirds of the Fortune 500 companies.
Attorney General Paxton made the announcement about the lawsuit in Washington Thursday.
Other state officials contend the MoneyGram checks should be sent back to the state of purchase.
Twenty-one states are teaming up against DE in a new Supreme Court case, claiming the tiny state for years stole checks that should have gone to other states.
In the lawsuit led by Texas and Arkansas, the states allege that DE and global financial transaction firm MoneyGram violated federal law by sending uncashed MoneyGram checks to DE instead of returning them to where they were purchased.
At the center of the current dispute is the Dallas-based money order firm MoneyGram, which has been funneling unclaimed funds to Delaware.
The suit argues that there is a 42-year old federal law which requires that unclaimed funds go to the state where the check was purchased, not to the financial firm’s corporate home state.
Earlier this year, an independent auditor completed an examination of abandoned “official checks” from MoneyGram in a select group of states and concluded that almost $200 million was owed to those states.
The alleged mishandling of the unclaimed checks was uncovered by the office of Arkansas State Auditor Andrea Lea. About half of all publicly traded U.S. companies are incorporated in the state, as well as some 60 percent of the Fortune 500 list.
On Feb. 10, 2015, an independent auditor completed an examination of abandoned “official checks” from MoneyGram in a select group of states and concluded that almost $200 million was owed to those states.
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Joining Kentucky, Arkansas and Texas in today’s filing are Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah and West Virginia.
