Four individuals have been charged in the District of Massachusetts with conspiring to deceive banks and credit card companies into processing more than $150 million in credit and debit card payments on behalf of merchants involved in prohibited and high-risk businesses, including online gambling, debt collection, debt reduction, prescription drugs, and payday lending, according to an indictment unsealed today in Boston. Three of the four individuals charged were arrested today. The fourth defendant has not yet been arrested and is a fugitive on separate federal charges.
According to court documents, Ahmad “Andy” Khawaja, 49, of Los Angeles, California, and Thomas Wells, 74, of Martin County, Florida, are charged with conspiracy to commit wire fraud. Mohammad “Moe” Diab, 45, of Glendale, California, and Amy Ringler Rountree, 38, of Logan, Utah, are charged with conspiracy to commit wire fraud and conspiracy to commit bank fraud. Federal agents arrested Diab, Rountree, and Wells this morning. They are expected to appear in federal court in Los Angeles, Salt Lake City, Utah, and Chicago, Illinois, respectively, later today or tomorrow. Khawaja is a fugitive from a December 2019 federal indictment filed in the District of Columbia that charges him, Diab, and others with campaign finance violations and obstruction of justice.
According to the indictment, executives of Allied Wallet Inc., a payment processing company headquartered in Los Angeles, secured payment processing for high-risk businesses through fraudulent misrepresentations about merchant clients. Khawaja served as Allied Wallet’s owner and Chief Executive Officer, Diab served as the Chief Operating Officer, and Rountree served as Vice President of Operations. Allied Wallet provided services enabling merchant clients to accept debit and credit card payments over global electronic payment networks run by card brands such as Visa, Mastercard, American Express, and Discover. Allied Wallet served as an intermediary between its merchant clients and financial institution members of the card brand networks. Wells, through his company Priority Payout, introduced merchant clients seeking payment processing to Allied Wallet.
The indictment alleges that Khawaja, Diab, Rountree, Wells, and others engaged in a scheme to defraud several financial institutions, the card brands, and others of money and property by fraudulently inducing them to provide payment processing services to merchants engaged in prohibited or high risk transactions, and to merchants that were terminated for fraud, chargeback, or other compliance concerns, through knowingly misrepresenting the types of transactions that the merchants were processing and the true identities of the merchants. The defendants and their co-conspirators accomplished the scheme through, among other steps, creating shell companies, designing fake websites that purported to sell low-risk retail and home goods, and using industry-standard codes that miscategorized the true nature of the transactions. Through the scheme, the defendants and their co-conspirators fraudulently obtained more than $150 million in payment card processing through more than 100 sham merchants.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Acting U.S. Attorney Nathaniel R. Mendell of the District of Massachusetts made the announcement.
The Food and Drug Administration – Office of Criminal Investigations, U.S. Postal Inspection Service, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations are investigating the case.
Trial Attorney Randall Warden of the Justice Department’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney and Deputy Chief Seth B. Kosto of the Securities, Financial & Cyber Fraud Unit at the U.S. Attorney’s Office for the District of Massachusetts are prosecuting the case.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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August 27, 2021 at 02:42AM
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Four Charged in Alleged $150 Million Payment Processing Scheme - Department of Justice
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