Security & Fraud

FTC Charges 12 With Laundering Millions In Credit Card Charges

The Federal Trade Commission (FTC) announced news on Monday (Aug. 7) that it charged twelve people with money laundering millions of dollars in credit card charges via fraudulent merchant accounts.

According a FTC press release, the defendants set up an operation known as Money Now Funding (MNF) to get and maintain merchant accounts that let it process credit card charges close to $6 million.

Back in September of 2013, the Federal Trade Commission said it charged Money Now Funding (MNF) with running a deception business scheme that told consumers they could earn thousands of dollars by lending money to small businesses. The court in that case ruled the promises made by the company were false.

In the case lodged against Money Funding Now on Monday, the FTC contends the defendants — which are an independent sales organization, sales agents and their principals — provided the MNF scheme access to the credit card networks by submitting and approving fraudulent applications in the names of more than 40 fictitious MNF companies. According to the FTC’s complaint, the defendants did so despite obvious signs that the companies were likely fictitious and being used to conceal the true identity of the underlying merchant.

By processing the MNF money laundering scheme’s transactions through fraudulent merchant accounts opened in the names of fictitious companies, the defendants allegedly also evaded the anti-fraud monitoring efforts of the credit card networks, the FTC said in the release. The defendants are charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule.

The ISO defendants — independent sales organizations and sales agents — are Electronic Payment Systems LLC, Electronic Payment Transfer LLC, John Dorsey, Thomas McCann and Michael Peterson. The sales agent defendants are Electronic Payment Solutions of America Inc., Electronic Payment Services Inc., KMA Merchant Services LLC, Dynasty Merchants LLC, Jay Wigdore, Michael Abdelmesseh (also known as Michael Stewart) and Nikolas Mihilli, the FTC said in the release.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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