U.S. probing 15 banks, payment processors for fraud

U.S. prosecutors have opened criminal and civil probes into at least 15 banks and payment processors as part of a wide-ranging consumer fraud investigation, according to documents released on Thursday by a congressional committee.

The Justice Department’s investigation, known as “Operation Choke Point,” is more than a year old and aims to crack down on fraud by going after firms that handle and move money for various subject businesses.

According to those documents released by the House of Representatives’ Oversight Committee, the DOJ had criminal probes open on four payment processors, one bank and several officials as of November 2013.

Maame Ewusi-Mensah Frimpong, an official in the DOJ’s civil division, in a November memo:

“We believe we already have denied fraudulent merchants access to tens, if not hundreds, of millions of dollars from consumers’ bank accounts, and that amount will increase daily and indefinitely.”

House Republicans, including oversight panel leader Darrell Issa, see the investigation differently. They say the DOJ has conducted a shadowy effect to put firms with legal activities out of business by pressuring banks to stop working with them.

Issa in a statement released with the documents:

“Operation Choke Point is the Justice Department’s newest abuse of power. If the administration believes some businesses should be out of business, they should prosecute them before a judge and jury.”

DOJ spokeswoman Emily Pierce in an email:

“When financial institutions choose to process transactions, even though they know the transactions are fraudulent or are willfully ignorant of that fact, they are breaking federal law and we will not hesitate to hold them accountable.”

Source: Reuters


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