21 States To Sue Delaware Over Millions Of Dollars In Unclaimed Checks

June 9, 2016

A group of 21 states is filing a lawsuit against the state of Delaware over the alleged mishandling of millions of dollars in unclaimed checks.

The attorneys general of Arkansas and Texas, the states leading the suit, announced that the lawsuit will be filed sometime Thursday. Between $150 million and $400 million might be at stake, the attorneys general say.

The suit centers on how Delaware handled uncashed and unclaimed checks sold by the money transfer service MoneyGram.

Under federal law, the office of Arkansas Attorney General Leslie Rutledge writes, “such abandoned and unclaimed property should be turned over to the state where the property was purchased.”

But instead, the lawsuit alleges, MoneyGram handed millions of dollars’ worth of the checks over to Delaware — the state where MoneyGram is incorporated, Rutledge says.

“Delaware in turn kept all moneys for its financial gain,” a statement from Texas Attorney General Ken Paxton’s office said.

The Dallas Morning News reports that Paxton says the mishandling of funds has been happening for four or five years.

“Arkansas taxpayers have been robbed,” Rutledge said.

The alleged mishandling of the unclaimed checks was uncovered by the office of Arkansas State Auditor Andrea Lea. The suit is being filed in U.S. Supreme Court, which has jurisdiction over disputes between the states.

In addition to Texas and Arkansas, the other states in the lawsuit are Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah and West Virginia.

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