FTC and State of Florida Sue CardReady for Card Laundering
The Federal Trade Commission and the State of Florida charged CardReady LLC with credit card laundering on Friday. The company is also accused of assisting and facilitating a debt relief telemarketing scam that allegedly stole millions of dollars from consumers.
Listed in the amended complaint are executives Brandon A. Becker, James F. Berland and Andrew S. Padnick, as well as E.M. Systems & Services LLC. They are being charged with creating at least 26 shell merchant accounts to process credit card payments for a fraudulent debt relief operation.
“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.”
Credit card laundering, which is a violation of the Telemarketing Sales Rule (TSR), is a way to process credit card transactions when scammers cannot gain access to credit card networks. Laundering enables criminals to charge the accounts of defrauded consumers through another person or entity, which allows them to evade detection.
In June 2015, a federal court stopped operations and froze the assets of the debt relief operation. Consumers were told the company, for an upfront fee, could save them money by reducing their credit card interest rate. Companies listed in the initial charges include E.M. Systems & Services LLC, Administrative Management & Design LLC, Empirical Data Group Technologies LLC, Epiphany Management Systems LLC, and KLS Industries LLC.