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DOJ Says Alleged Payment Processing Scam Bilked $150M

Four people have been charged with conspiring to deceive banks and credit card companies, according to a press release from the U.S. Department of Justice (DOJ).

They’re accused of defrauding the companies into processing over $150 million in credit and debit card payments for merchants involved in online gambling, debt collection, debt reduction, prescription drugs, and payday lending, the release stated, citing an indictment from Boston.

Ahmad “Andy” Khawaja and Thomas Wells are charged with conspiracy to commit wire fraud. Mohammad “Moe” Diab and Amy Ringler Rountree are charged with conspiracy to commit wire fraud and conspiracy to commit bank fraud, according to the release.

Officials from payment processing company Allied Wallet had gotten jobs from high-risk companies by fraudulently misrepresenting themselves about their merchant clients, the release stated.

Allied Wallet, for which all the defendants worked in some capacity, purported to offer services that allowed merchants to accept debit card and credit card payments, doing so through global payment networks run by brands like Visa, Mastercard, American Express and Discover, according to the release.

The company also served as an intermediary between its clients and the financial institutions (FIs), and the four defendants performed a scheme to defraud numerous FIs, convincing them to provide payment processing services for merchants engaged in prohibited or high-risk transactions, the release stated. The company also worked with merchants terminated for concerns like fraud, chargeback or other compliance-related issues.

The defendants reportedly did all of this through creating shell companies and making fake websites offering to sell low-risk retail and home goods, and miscategorizing the real nature of what they were doing.

In other news, Jonathan Kanter, a critic of Google and a progressive favorite, has been nominated to lead the DOJ. He was selected along with Lina Khan, who has been known for critiquing Big Tech, to lead the Federal Trade Commission.

Read more: Big Tech Critic Jonathan Kanter Nominated By Biden For DOJ Antitrust Job

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