Florida Payment Processor Charged with Credit Card Laundering, Assisting with Debt Relief Scam

Florida Payment Processor Charged with Credit Card Laundering, Assisting with Debt Relief Scam
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January 8, 2016

A Florida-based payment processing business has been charged with credit card laundering and illegally assisting and facilitating a nationwide debt relief scheme that allegedly bilked millions of dollars from consumers.

The Federal Trade Commission (FTC) and the state of Florida filed a complaint against CardReady LLC and its executives, Brandon Becker, James Berland and Andrew Padnick, along with E.M. Systems & Services for violations of the Telemarketing Sales Rule (TSR) and Florida state laws.

A federal judge has temporarily stopped the scam from operating and froze the defendants' assets.

According to the FTC's complaint, the defendants arranged for at least 26 shell merchant accounts to be used to process credit card payments for a debt relief operation. The agencies charged the payment processor defendants, as well as E.M. Systems & Services, with credit card laundering under the TSR and illegal factoring of credit card transactions under Florida law. The FTC also charged CardReady and its executives with assisting and facilitating the debt relief scam.

"Our investigation went beyond the telemarketers who swindled consumers out of their money," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "We also stopped the credit card processing operation that hid their illegal transactions. Credit card laundering isn't just bad business – it's against the law."

When scammers can't gain or maintain access to credit card networks, they frequently turn to illegal credit card laundering as a way to process credit card transactions through another person or entity. Doing so helps scammers evade detection and charge the accounts of defrauded consumers.