The U.S. Justice Department (DOJ) and the U.S. Federal Trade Commission (FTC) announced that they would collect $650,000 in consumer redress from the German Nexway Group (previously asknet) and its officers Victor Iezuitov and Casey Potenzone. The credit card processor accepted and facilitated scam operators. The payment of the $650,000 will result in suspending the total monetary judgment of $49.5 million granted by the court.
In a complaint, the U.S. government alleges that, since at least August 2016, the defendants violated the FTC Act and the Telemarketing Sales Rule (TSR) by processing credit card payments for India-based Tech Live Connect (TLC) and other foreign clients that commit telemarketing fraud via tech support scams. Nexway and its officers have agreed to court orders that prohibit them from any further payment laundering and require them to monitor other high-risk clients for illegal activity closely.
The complaint alleges that Nexway helped clients open and use merchant accounts to process credit card charges. In a typical scam, Nexway’s client caused deceptive pop-up notifications on a consumer’s computer screen, warning that the computer was infected with a virus or freezing the screen and displaying a phone number to call for help. Consumers who called reached call centers in India were convinced to pay for “repairs.”
Nexway processed the consumers’ credit card charges and received a commission for each charge. The complaint alleges that Nexway and its principals worked with TLC and other fraudster clients despite knowing or consciously avoiding knowing that they were engaged in fraudulent telemarketing and other deceptive practices. The government also asserts that Nexway engaged in “credit card laundering” by allowing its clients to use Nexway’s credit card merchant accounts for their scams even though Nexway was not the merchant on those transactions.
“Companies like Nexway that knowingly launder charges for scammers are breaking the law and helping scammers cheat money from consumers,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “The FTC will not hesitate to use its law enforcement powers to stop them.”
