Los Angeles, California - Payment processor Allied Wallet, its CEO and owner Ahmad (“Andy”) Khawaja, and two other officers, Mohammad (“Moe”) Diab and Amy Rountree, have agreed to settle Federal Trade Commission charges that they assisted numerous scams by knowingly processing fraudulent transactions to consumers’ accounts.
According to the FTC’s complaint, the operators of Allied Wallet knowingly processed payments for merchants that were engaged in fraud. These include merchants that were subject to law enforcement action by the FTC and the SEC, such as Stark Law, a phantom debt collection scheme; TelexFree, a pyramid scheme; and MOBE and Digital Altitude, two business coaching schemes that defrauded consumers with claims they would make substantial income.
The FTC alleges that the defendants—often in close collaboration with FTC scofflaw and Allied Wallet sales agent, Thomas Wells—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 stipulated final orders regarding Khawaja, his four corporations that do business as Allied Wallet, and Allied Wallet’s former VP of Operations, Amy Rountree, prohibit them from processing payments for certain types of merchants, including sellers and marketers of money making opportunities and debt collection services. The orders impose stringent screening and monitoring requirements on payment processing for certain other categories of merchants to ensure proper screening and vetting by Allied Wallet, Khawaja, and Rountree.
The order against Khawaja and his companies, AlliedWallet, Inc., Allied Wallet, Ltd., GTBill, LLC, and GTBill Ltd., imposes a $110 million equitable monetary judgment. After Khawaja turns over a residence in Los Angeles, California, the remainder of the judgment will be suspended due to inability to pay.
The order against Rountree imposes a $320,429.82 equitable monetary judgment that is suspended due to inability to pay.
The stipulated final order against Diab, who was Allied Wallet’s Chief Operating Officer, permanently bans him from payment processing and requires him to pay $1 million to the FTC in equitable monetary relief.
The Commission vote authorizing the staff to file the complaint and stipulated final orders was 5-0. The FTC filed the complaint and final orders in the U.S. District Court for the Central District of California.