Information broke of Allied Pockets executives being indicted on felony prices final Friday.
On the time I used to be unable to entry what I believed was a sealed indictment.
Positive sufficient a sealed indictment was filed on August twenty fifth. Pending the arrest of three of the suspects, all of which have been US-based, the DOJ requested the indictment be sealed.
The arrests went down on August twenty sixth, prompting the unsealing of the case and entry to the unique indictment.
At the moment we go over the indictments of Allied Pockets defendants Ahmad Khawaja, Mohammed Diab, Amy Rountree and Thomas Wells.
The August twenty fifth indictment was returned within the District of Massachusetts.
Allegations detailed within the indictment pertain to operation of Allied Pockets, of which Ahmad “Andy” Khawaja (proper) is each proprietor and CEO of.
- Mohammed “Moe” Diab, a resident of California, is Allied Pockets’s Chief Operation Officer
- Amy Ringler Rountree, a resident of Utah, is Allied Pockets’s Vice President of Operations
- Thomas Wells, a resident of Florida, owns Precedence Payout, a reseller of Allied Pockets’s companies
Different events named within the indictment (however who will not be topic to indictment themselves), embrace
- Payvision, a Netherlands firm Allied Pockets relied on to amass fee processing companies;
- WireCard AG, a German firm Allied Pockets relied on to amass fee processing companies;
- an unnamed resident of Sweden who resold Allied Pockets’s companies to on-line gaming companies;
- Rudy Dekermenjian, a Californian lawyer who serves as Allied Pockets’s basic counsel;
- Fifth Third Financial institution, an Ohio monetary establishment used to settle service provider processing transactions for Allied Pockets by Vantiv Inc;
- Vantiv Inc, an Ohio primarily based agency that Allied Pockets relied on to amass fee processing companies; and
- an unnamed service provider shopper working a scholar debt consolidation enterprise that utilized Allied Pockets’s companies by Vantiv Inc.
The indictment alleges Khawaja, Diab, Rountree, Wells and several other of the events above
have interaction(d) in a scheme to defraud a number of Acquirers, Issuers, Service Suppliers, and Card Manufacturers of cash and property by fraudulently inducing them to offer fee processing companies to retailers
(i) engaged in prohibited or excessive danger transactions; and
(ii) that have been terminated for fraud, chargeback, or different compliance considerations, by knowingly misrepresenting the varieties of transactions the retailers have been processing and the true identities of the retailers.
The DOJ alleges this scheme noticed Allied Pockets receive “greater than $150 million in fee card processing by greater than 100 sham retailers”.
The sham retailers set as much as defraud monetary establishments have been
non-existent companies that presupposed to promote house decor, kitchen provides, musical devices, and different retail merchandise with low danger of chargebacks and fraud.
Allied Pockets and its executives went as far as to create pretend web sites that corresponded with the pretend companies they have been buying processing companies by.
These web sites, known as “transaction laundering web sites”
usually didn’t course of transactions however existed solely to hide the true retailers’ prohibited and excessive danger transactions.
Not surprisingly, Allied Pockets’s jurisdiction of alternative for establishing pretend corporations was the UK.
(Allied Pockets) Integrated shell corporations, most frequently in the UK.
The shell corporations used nominee administrators, rented mailing addresses … and generic names that backstopped the sham retailers’ names on the service provider functions and transaction laundering web sites.
BehindMLM has repeatedly slammed the UK as a scam-friendly incorporation jurisdiction with no regulation to talk of.
To today UK authorities enable scammers to arrange fraudulent shell corporations with no oversight, no effort minimal price and no repercussions.
It’s value noting that any time you see a dodgy MLM firm aligning itself with an in any other case respected finance firm (MasterCard is a favourite for some purpose), these companies are at all times obtained by dodgy shell corporations (arrange within the UK or elsewhere).
To masks the precise retailers they have been offering fee processing companies to, Allied Pockets
- chosen retail enterprise service provider class codes for the shell corporations they arrange;
- structured shell corporations in order to keep away from fee of upper charges;
- used name facilities that Thomas Wells owned to offer contact particulars for arrange shell corporations;
- instructed name heart employees to not reveal the true service provider’s names if a service supplier referred to as concerning a chargeback or fraud allegation;
- distributed processing throughout a number of shell corporations to “keep away from chargeback and transaction thresholds that will set off potential fines … and to subvert monitoring and compliance applications”; and
- lied to service suppliers in the event that they uncovered the character of the transactions being pushed by Allied Pockets’s shell corporations.
The indictment particulars examples of fraud by Allied Pockets’s servicing of payday pending, debt assortment, on-line playing, pharmaceuticals and managed substances.
In a single instance, Wirecard, a monetary companies firm,
instructed Allied Pockets to terminate a sham service provider purporting to promote cellphone playing cards however that Wirecard suspected of being a entrance for on-line playing.
Diab emailed Allied Pockets’s pretend due-diligence for the Sham Service provider to Wirecard, promising to terminate all cellphone card retailers.
In response solely to Diab, Khawaja wrote: “Good one :)”
On the identical day that Wirecard instructed Allied Pockets to terminate (the) sham service provider, Diab emailed Wells and Khawaja requesting a brand new transaction laundering web site for a brand new sham service provider.
In one other instance associated to pharmaceuticals,
after Payvision alerted Allied Pockets that it suspected a retail jewellery service provider of being a entrance for on-line playing in Turkey and Japan, Rountree shared Payvision’s suspicions verbatim with (an Allied Pockets) reseller, Diab, and others.
(She then) endorsed them to create a brand new transaction laundering web site “with a enterprise that is sensible for the variety of instances clients are being charged in addition to avoiding all different considerations the financial institution is having … That’s the reason we gave you all of the financial institution’s feedback.
We don’t usually try this. Take their notes, provide you with one other (sham) web site that can match higher.”
Sadly there are not any MLM examples offered.
BehindMLM’s curiosity on this case stems from Allied Pockets popping up as a processor for Visitors Monsoon, MOBE and TelexFree.
There are a lot extra MLM corporations Allied Pockets serviced. Sometimes we don’t listing fee processors in our evaluations nevertheless until there’s associated regulatory litigation.
To exhibit revenue as a motivating issue for fraud, the DOJ gives one e mail despatched by Diab to Rudy Dekermenjian.
The e-mail pertained to a scholar mortgage debt discount enterprise, particularly how a lot to cost them.
On that Diab instructed Dekermenjian;
You have to keep in mind, they will’t discover properties, that’s why they want us. So promote them excessive and earn a living.
Primarily based on the proof submitted, a Grandy Jury indicted
- Khawaja, Diab, Rountree and Wells on one rely of conspiracy to commit wire fraud; and
- Diab and Rountree on one rely of conspiracy to commit financial institution fraud.
The DOJ is looking for forfeiture towards all 4 defendants.
Diab Rountree and Wells have been all arrested within the US on August twenty sixth.
Ahmad “Andy” Khawaja stays a fugitive in hiding. He has been needed by US authorities following a previous unrelated indictment in 2019.
Khawaja is married to a Lithuanian nationwide. The DOJ consider Khawaja is hiding in Lithuania.
In September 2020 it emerged Khawaja, who’s married to a Lithuanian nationwide, had been picked up by Lithuanian authorities on a world arrest warrant.
The result or standing of Khawaja’s extradition proceedings in Lithuania are unclear. I couldn’t discover any followup info.
Khawaja’s present standing stays unknown.