U.S. Middle District Judge Christopher Conner accepted a deferred prosecution agreement between federal prosecutors and the Dallas-based payment services provider.
Prosecutors said the company turned a blind eye to scam artists and money launderers, and failed to act against agents linked to fraud schemes.
Assistant U.S. Attorney Kim Daniel said the agreement included "a clear statement and acknowledgement of responsibility" and MoneyGram has agreed to cooperate with investigators. It has already paid $65 million, with the rest due early next year.
MoneyGram lawyer David Zinn noted the company has already made changes, including the replacement of its senior management team and stronger compliance and financial intelligence efforts.
Several of Conner's questions related to the restitution fund, which will be administered by a vendor chosen by the U.S. Postal Service. Daniel said oversight would ultimately be in the hands of the Justice Department.
If the company fulfills its obligations under the deal, after five years federal prosecutors will seek dismissal of the charges of aiding and abetting wire fraud, and failure to maintain an effective money laundering prevention program.
MoneyGram has agreed to structural changes, and to retain for five years a corporate monitor who will report to the Justice Department.
MoneyGram, based in Dallas, has about 275,000 locations in 190 countries, with independent outlets owned by agents who split fees with the company.
Federal prosecutors said company officials were aware that some agents were engaged in fraud but decided not to sever their relationship, and ended up profiting from the illegal acts.
The fraud included promising people large prizes, offering expensive items at very low prices, holding out false jobs as "secret shoppers" and making fake distress phone calls posing as family members in desperate for financial help.
Between 2004 and 2009, MoneyGram customers filed about 64,000 consumer fraud reports in the U.S. and Canada, with losses worth a combined $128 million.
Daniel said the investigation began with postal inspectors responding to complaints. At least 25 agents have been charged with related offenses in the Middle District of Pennsylvania, and
At the request of federal prosecutors, in 2009 the company closed 400 outlets thought to be involved in consumer fraud.
Information about the victim compensation fund will be posted on a Justice Department website. Victims can call 877-282-2610 in the United States or 317-324-0390 in other countries.