When Louise Precht’s grandson, Greg, called last year to tell her he was locked up in a Canadian jail and needed $5,000 to get out, the Swansea woman didn’t hesitate.

It was just a week before Christmas, but Precht didn’t need the season to be charitable. After all, Precht’s grandson had been through enough recently.

Seriously injured in Iraq, the Purple Heart recipient had been released from Walter Reed Army Medical Center and returned to active duty. Precht would happily pay to get him out a jam stemming from a traffic accident in a foreign country.

She wired $5,000 via MoneyGram, and he called her back. Authorities in Ontario needed another $5,000. Only then did Precht begin to suspect that man calling her wasn’t her grandson. “I said, ‘Greg, what was your grandfather’s first name?’”

The man said that he didn’t have time for that kind of thing - other inmates needed to use the phone. Just send the money fast, he pleaded. Precht asked again, and the man hung up.

Precht told her story Tuesday at the Washington headquarters of the Federal Trade Commission, which announced an $18 million legal settlement with Minneapolis-based MoneyGram International, the nation’s second largest money-transfer service.

The imposter who cheated Precht, like scores of other fraudsters based in Canada, insisted that the grandmother send money via wire transfer. Con artists prefer that method because money can be picked up immediately and the payments are often untraceable. Unlike with credit cards, consumers defrauded via wire transfer have no charge-back rights.

The FTC says that, last year, more than 14,000 consumers complained to the commission about being cheated by scams involving wire transfers at companies like MoneyGram.

“These consumers were swindled out of almost $140 million through a variety of money transfer scams - including false promises about sweepstakes or lottery winnings, guaranteed loans regardless of credit history, jobs as “mystery shoppers,’ and even fake cashier’s checks,” said David Vladeck, director of the FTC Bureau of Consumer Protection, at the press conference. “For consumers scammed by crooks working out of Canada, nearly two-thirds said that they paid using money transfers.”

Vladeck said that, in the last three years, 80 percent of the money MoneyGram moved from the U.S. to Canada was related to fraud. He said the company turned a blind eye to the scammers using its service.

The FTC said that from 2004 to 2008, MoneyGram received more than 41,000 fraud complaints from American consumers. The company’s own fraud department warned that something was amiss, as did law-enforcement agencies, Vladeck said.

“These danger signals were loud and clear alarms,” Vladeck said. “Nonetheless, MoneyGram took no action, other than to profit from these ongoing scams.”

According the FTC, at least 65 of MoneyGram’s Canadian agents have been charged or are being investigated for colluding in fraud schemes. The commission also said a FTC study of a four-month period in 2007 indicated that 79 percent of all of the company’s U.S.-to-Canada transfers were fraudulent.

In a prepared statement, MoneyGram chief executive Pamela Patsley denied that the company hadn’t done enough to prevent fraud. She MoneyGram will redouble those efforts by building “a state-of-the-art consumer anti-fraud program.”

The program, which will include background checks on MoneyGram agents and increased monitoring, is mandated by the company’s settlement with the FTC. The settlement also orders the company to fire or suspend any agent who has not taken appropriate steps to stop fraudulent transfers.

The company also will pay $18 million , which the FTC will pay to consumers who were defrauded in scams involving MoneyGram transfers.