Indiana joins lawsuit against Delaware to reclaim abandoned MoneyGram checks

Staff Report
TheStatehouseFile.com

INDIANAPOLIS — The State of Indiana is joining 20 other states in a lawsuit against the State of Delaware in an attempt to reclaim millions of dollars from abandoned MoneyGram checks.

The dispute is about which states are entitled to abandoned and unclaimed “official checks,” essentially money orders or traveler’s checks, sold by MoneyGram, a money-transfer service company.

The lawsuit alleges Delaware made the error due to a mistaken belief that such abandoned and unclaimed property is supposed to be turned over to the state in which the money-order issuing company is incorporated—in this case Delaware.

The State of Indiana and the 20 other states argue federal and state laws require these funds to be turned over to the state where the money orders or traveler’s checks were bought.

As the lawyer for Indiana state government, Attorney General Greg Zoeller’s office represents Indiana in the lawsuit.

“This is an extraordinary legal step and one we do not undertake lightly,” said Zoeller in a statement.  “We respect our counterparts in Delaware state government, but we contend they have misinterpreted state and federal law, to the detriment of unclaimed property programs in Indiana and elsewhere that should administer these funds for their rightful owners.”

The lawsuit was filed Thursday directly in the U.S. Supreme Court, which has original jurisdiction in state-vs.-state disputes. The lawsuit claims an independent audit found the state of Delaware owes a select group of state nearly $200 million. Indiana’s amount for MoneyGram purchases has yet to be calculated.

The 21 states suing are asking the Supreme Court to order the appropriate repayment by Delaware.

“When state governments have legal disputes against each other that cannot be resolved through informal efforts, it is appropriate to raise the legal question to the U.S. Supreme Court to answer,” Zoeller said in a statement.

No court dates have been scheduled. Zoeller noted that if they win, then the unclaimed funds would return to Indiana and the other states involved in the lawsuit.

According to the Indiana Attorney General’s office, generally speaking, abandoned bank accounts, unpaid insurance proceeds and other forms of unclaimed funds in Indiana by statute eventually go to the state’s Unclaimed Property Division.

Indiana’s Unclaimed Property Division maintains a searchable database at IndianaUnclaimed.gov that holds more than $450 million in lost and forgotten assets.

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