UK financial regulators have seized £2 million (US$2.57) from digital payments processor QPay Europe. The Financial Conduct Authority (FCA) claimed the funds were proceeds of a $150 million US bank fraud linked to illegal online gambling and other “high risk” transactions.
The FCA is not alleging QPay was directly involved in the US conspiracy. However, the financial watchdog said it observed the firm “move the money repeatedly to different bank accounts in several countries.” None of the transactions appeared to be related to legitimate businesses, it added in a news release.
QPay received the money from a software firm called Fintech International Q Software WLL, allegedly as an investment, according to the FCA. The agency spotted the suspicious money flows after QPay applied to be regulated by the FCA in 2020. The company has since withdrawn its application.
Allied Wallet Indictments
In August 2021, four US citizens were charged in the District of Massachusetts with conspiring to hoodwink banks and credit card companies into processing $150 million in illegal and high-risk payments.
In addition to unregulated online gambling transactions, these included payments to debt collection, debt reduction, prescription drugs, and payday lending merchants, according to the indictment.
Through their company, Los Angeles-based Allied Wallet Inc, the four suspects were heavily involved in a practice known as transition-laundering, whereby digital payments to illegal or high-risk merchants are disguised as legitimate transactions.
Thomas Wells, 74, of Martin County, Florida, Mohammad “Moe” Diab, 45, of Glendale, California, and Amy Ringler Rountree, 38, of Logan, Utah, were arrested by federal agents in August 2021 and charged, variously, with conspiracy to commit wire fraud and conspiracy to commit bank fraud. All three served as executives for Allied Wallet.
Arrested in Lithuania
The company’s founder and CEO, Ahmad “Andy” Khawaja was arrested in Lithuania in September 2020 on an international arrest warrant. US officials asked that he remain in custody pending extradition hearings. The outcome of those proceedings is unclear.
Allied Wallet defrauded several financial institutions and credit companies by “inducing them to provide payment processing services to [illegitimate merchants] … through knowingly misrepresenting the types of transactions that the merchants were processing and the true identities of the merchants,” according to federal prosecutors.
They accomplished this by “creating shell companies, designing fake websites that purported to sell low-risk retail and home goods, and using industry-standard codes that miscategorized the true nature of the transaction,” the indictment says.
Donations to Clinton, Trump
A 2018 investigation by the Associated Press found that Khawaja had donated at least $6 million to both Republican and Democratic political campaigns from 2015 onwards.
After holding a fundraiser for Hillary Clinton’s failed 2016 presidential campaign, he began courting Republicans. He met Donald Trump at a fundraiser just weeks after he clinched the presidency, donating $1 million to his inauguration campaign, according to the AP.
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