Under the terms of the deal with the U.S. Attorney's Office for the Middle District of Pennsylvania and the Department of Justice, MoneyGram International Inc. said it has also taken other steps to prevent more scams. These include adding more investigators and beefing up technology to detect fraud.
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 officer, 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."
The Dallas-based company also said Friday that it lost $54.1 million, or 77 cents per share, in its third quarter due to costs related to the fraud settlement and related legal expenses. It had net income of $15.8 million, or 22 cents per share, a year ago.
Its revenue rose 5 percent to $338.6 million from $322 million a year ago.
It now expects full-year earnings to come in at the low end of its previous expectations.