SOURCE: Pennsylvania Treasury

Pennsylvania Treasury

February 29, 2016 16:28 ET

PA Treasury Files Suit to Recover $10 Million in Unclaimed Property

Funds Were Wrongly Submitted to Delaware

HARRISBURG, PA--(Marketwired - February 29, 2016) -  State Treasurer Timothy A. Reese has filed a lawsuit in the U.S. District Court for the Middle District of Pennsylvania to recover more than $10 million in unclaimed property funds that were wrongly submitted to the state of Delaware over 10 years. The lawsuit was filed against the Delaware State Escheater, which administers Delaware's unclaimed property, and MoneyGram, Inc., which sells money orders in Pennsylvania and other states.

Treasury argues that under federal and Pennsylvania law, when a money order is not cashed after the requisite time period, any funds associated with the uncashed money order becomes unclaimed property and should be remitted to the state where the money order was purchased. Instead, MoneyGram has been submitting the unclaimed money to Delaware where it is incorporated. 

"As Treasurer I have a fiduciary obligation to protect the financial assets of Pennsylvania and its residents," said Reese. "Federal law prevents Delaware from collecting money associated with unclaimed money orders that belong to Pennsylvania and the other states. Put simply, unclaimed property from Pennsylvania should stay in Pennsylvania." 

An outside auditor retained by Treasury determined that during the period of 2000-2009 MoneyGram wrongly remitted nearly $10.3 million in funds associated with uncashed money orders purchased in Pennsylvania to the Delaware State Escheater rather than the Pennsylvania Treasury. 

Treasury seeks a declaratory judgment that the MoneyGram check orders are subject to the Federal Disposition Act and the Pennsylvania Unclaimed Property Act, that MoneyGram and Delaware have violated the law, and that all past and future funds associated with unclaimed money orders be remitted to the Pennsylvania Treasury.

Click here to view the full brief filed in federal court.

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