FTC sues Allied Wallet for assisting scams with stealing $110 million
Payment processor Allied Wallet has been sued by the FTC for violations of the FTC Act.
The regulator alleges Allied Wallet assisted “business opportunity and coaching scams, pyramid schemes, and unlawful debt collection operations” with illegally charging over $110 million to consumer accounts.
According to the FTC, since at least 2012 defendants Allied Wallet and its principals have
helped numerous dubious merchants hide their fraud from banks and the credit card networks.
The defendants’ deceptive practices included creating fake foreign shell companies to open accounts in their names, submitting dummy websites and other false information to merchant banks, and actively working to evade card network rules and monitoring designed to prevent fraud.
The FTC’s lawsuit specifically focuses on transactions related to TelexFree, Digital Altitude and Mobe, as well as $1.1 million processed for a phantom debt collector.
Not surprisingly, Allied Wallet assisted US-based scams through UK shell companies.
BehindMLM has previously covered the UK being a darling jurisdiction for scams to incorporate in.
To this day UK authorities remain either unable or unwilling to regulate Companies House in a timely manner.
Allied Wallet principals named in the FTC’s lawsuit include owner and CEO Ahmad “Andy” Khawaja, COO Mohammad “Moe” Diab and VP of Operations Amy Rountree (aka Amy Ringler).
Rather than defend themselves, the Allied Wallet defendants have reached settlement with the FTC.
Accordingly, stipulated final orders were filed against the Allied Wallet defendants on May 20th.
Ahmad Khawaja (right) and Allied Wallet are subject to a monetary judgment of $110,050,941 – the amount processed for TelexFree, Digital Altitude and MOBE.
Through financial statements and related documents, Khawaja has represented he is unable to satisfy judgment.
Thus Khawaja’s settlement will see him give up a California residence with an estimated $500,000 value. The remainder of the $110 million dollar judgment is suspended.
Mohammad Diab’s settlement will see him pay $1,000,000 in monetary relief.
Amy Rountree’s settlement is for $320,429, all of which has been suspended – again based on submitted financial statements.
Additionally the Allied Wallet defendants are prohibited from having anything to do with payment processing, money making opportunities.
This includes services related to credit repair; credit card protection, identify theft protection, debt management, mortgage or loan modification, government grants, timeshare resale or outbound telemarketing.
Twelve months after judgment, the defendants are to submit a compliance report to the FTC.
Thereafter, for the next nineteen years they must report any change in personal details or business activity they are involved in.
One final thought on the judgments, while I’m aware the FTC has to rely on submitted financial statements, given these three were in the business of assisting companies launder funds for over a decade – what’s the bet they themselves have stashed away money?
Bit hard to believe the operators of a processor processing over a hundred million dollars for scams spent it all.
If I had to guess, cryptocurrency. But with the familiarity with shell companies the Allied Wallet defendants had, who knows.
What we do know is that since 2015, Allied Wallet and Khawaja have donated over $6 million to both Clinton and Trump’s political campaigns.
Hopefully this isn’t a case of the wool being pulled over the FTC’s eyes. Sadly my gut feeling is that it probably is.