Utah has joined a coalition of 21 states in a lawsuit against the state of Delaware claiming that at least $200 million in abandoned and unclaimed money belongs to the other states but is being illegally retained by Delaware. The suit was filed last week in the U.S. Supreme Court and is being led by Arkansas Attorney General Leslie Rutledge and Texas Attorney General Ken Paxton.
Utah has joined a coalition of 21 states in a lawsuit against the state of Delaware claiming that at least $200 million in abandoned and unclaimed money belongs to the other states but is being illegally retained by Delaware. The suit was filed last week in the U.S. Supreme Court and is being led by Arkansas Attorney General Leslie Rutledge and Texas Attorney General Ken Paxton.
The claim is being made under the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act. The ultimate dollar figure that Delaware owes other states may be much higher, according to the suing states.
The dispute is about which state is entitled to abandoned and unclaimed “official checks” sold by MoneyGram, a money transfer services company that operates in all 50 states and internationally. With Delaware’s acquiescence, guidance and direction, millions of dollars in unclaimed “official checks” have been wrongfully escheated, or turned over, to the State of Delaware, the suit says. This error was based on the mistaken belief that such abandoned and unclaimed property is supposed to be turned over to the issuing company’s state of incorporation, in this case Delaware. Federal law and the law in each of the plaintiff states is clear that such abandoned and unclaimed property should be turned over to the state where the property was purchased, the suit states
The coalition is asking the Supreme Court to declare that the plaintiff states, and not Delaware, are entitled to the hundreds of millions of dollars improperly turned over to Delaware and to all future similar abandoned and unclaimed property. The coalition is also asking the court to order the appropriate repayment to plaintiff states by Delaware.
“This case is not about MoneyGram. I believe MoneyGram made payments in good faith based on what Delaware instructed it to do. This is a disagreement between states about the proper distribution of abandoned property,” said Utah Attorney General Sean Reyes. “Hundreds of millions of dollars have been inappropriately turned over to the state of Delaware instead of to states where the property was purchased. We believe, and a recent audit substantiates, that these dollars should be repaid by Delaware to Utah and other states joining this action.”
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 nearly $200 million was owed to those states.
In addition to Utah, joining Arkansas and Texas in the filing are Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina and West Virginia.