Money transmitting firm PoaPay, LLC has been banned from engaging in foreign transmittal business in the state of Massachusetts for a period of 10 years and fined $200,000 for violating the commonwealth’s money transmittal rules.
PoaPay, a firm that is headquartered in Birmingham, Alabama and offers money remittal services exclusive to Kenya, was flagged by Massachusetts’s Office of Consumer Affairs & Business Regulation (OCABR) in a complaint initially filed in April, 2016 for various violations including:
- Conducting money transmittal business in the state for a period of one year without a license. OCABR says PoaPay transmitted over $11 million and collected over $250,000 in transmittal fees in the state of Massachusetts from July 13, 2013 through September 23, 2014. PoaPay was not issued with a license to operate in the state until September 24, 2014.
- Failure to file Suspicious Activity Reports (SARS) that may identify suspicious activity. In one instance, OCABR says a couple in the state sent approximately $1.5 million to Kenya over the course of 8 months, but no documentation was provided to account for the source of funds. In some other instances, separate huge sums of money were sent on the same day, or in close succession, or multiple people sent huge sums to the same beneficiary in a short time period.
- PoaPay failed to block people or organizations on the government’s sanctioned or blocked list from transmission money.
- PoaPay did not maintain an escrow account in its own name in Massachusetts as required by the law. Instead consumers deposit cash or checks used for transfers directly into PoaPay’s operating account.
- The company’s operating account was used for personal transactions, in violation of the licensing rules.
- PoaPay did not have adequate bond coverage. OCABR for example says PoaPay reported $20.2 million in remittances during 2015, which would have required minimum bond coverage of $776,362. The company however maintained a bond of only $200,000 during the end of the year.
- Records indicated that 13% of customers provided incorrect information, which was not flagged by PoaPay. An example is a customer who transmitted $7,000 and listed an address of “Raleigh, North Carolina” MA, 27604.