Arkansas and Texas as part of a group of 21 states filed suit in the U.S. Supreme Court against the state of Delaware for unclaimed property.
Arkansas Attorney General Leslie Rutledge and Texas Attorney General Ken Paxton are co-leading a group of 21 states in a U.S. Supreme Court filing against the state of Delaware.
According to the dispute, Delaware has collected millions of dollars in unclaimed “official checks” sold my MoneyGram, a money transfer services company. MoneyGram has been submitting the uncashed money orders to Delaware, where it is incorporated, instead of back to the state where the money order was purchased.
The states allege that Delaware and MoneyGram have violated the federal Disposition of Abandoned Money Orders and Traveler’s Checks Act by confiscating uncashed checks instead of returning the funds to the state from which they were issued.
“Arkansas taxpayers have been robbed,” said Arkansas Attorney General Rutledge. “Delaware is simply not entitled to unclaimed monies that lawfully belong to 49 other states. I am also very appreciative of the hard work of Auditor Andrea Lea’s office for originally identifying this issue and diligently working with us to try to recover the sums owed to the state.”
According to the Arkansas attorney general’s office, 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.
The Texas attorney general’s office said in a press release, “Texas could be owed more than $ 10 million and if all 49 states were to claim what is rightfully theirs, the amount could reach the $400 million.”
Delaware Secretary of Finance, Thomas J. Cook responded to the announcement with the following statement via email: “Today we learned of a lawsuit filed by Texas and other states relating to Moneygram’s practice of remitting a specific type of abandoned property to Delaware, its state of incorporation. This issue has been the subject of two prior lawsuits, filed by Pennsylvania and Wisconsin, against Delaware in federal district courts earlier this year. Delaware disputes the allegations in those suits and, to bring some clarity to this issue, filed an action in the U.S. Supreme Court last week to resolve the outstanding legal question. Delaware cannot speculate why Texas did not intervene in the existing Supreme Court case, but is hopeful that the Supreme Court will provide all states with guidance on how companies should handle this particular type of unclaimed property in the future.”
The other states participating in the filing with Arkansas and Texas are: Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah and West Virginia.