Blog Enforcement Watch February 16, 2021

FTC Announces $10.9 Million Settlement for Credit Card Laundering Scheme

​On February 10, 2021, the Federal Trade Commission (FTC) announced settlements with two payment processing companies and two individuals, resolving claims concerning an alleged credit card laundering scheme perpetrated in violation of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 53(b), and the Telemarketing and Consumer Fraud and Abuse Act (Telemarketing Act), 15 U.S.C. §§ 6101–08​.​

​​The stipulated orders with the payment processing companies and individuals (here and here​) resolve a lawsuit brought by the FTC that has been pending since 2017 in the U.S. District Court for the District of Arizona.  The FTC continues to litigate against four other defendants for their role in the alleged scheme. ​

According to the FTC, the companies and individuals assisted in a credit card laundering scheme to obtain and maintain fraudulent merchant accounts that, in turn, allowed them to process ​nearly $6 million in credit card charges. The stipulated orders would require the companies and individuals to collectively pay over $10.8 million, although those monetary judgments have been suspended due to the defendants’ inability to pay.  Additionally, at least one of the individuals must permanently cease from working in the payment processing altogether.

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