BOSTON, Massachusetts — A Logan woman and another man have pleaded guilty to conspiring to deceive banks into processing more than $150 million in credit and debit card payments on behalf of merchants involved in prohibited and high-risk businesses, including online gaming, debt collection, debt relief, online pharmaceuticals and payday lending, among others.
Amy Rountree, 41, and Mohammad “Moe” Diab, 48, of Glendale, Calif. pleaded guilty to one count each of bank fraud conspiracy before United States District Judge Nathaniel M. Gorton. The Court deferred acceptance of Rountree and Diab’s pleas until their sentencing hearings, which are scheduled for Nov. 19, 2024 and Nov. 20, 2024, respectively.
Rountree and Diab were charged along with two co-defendants: Thomas Wells, 77, of Martin County, Fla. and Ahmad “Andy” Khawaja, 52, of Los Angeles, Calif. Wells pleaded guilty to wire fraud conspiracy in October 2021 and is awaiting sentencing. Khawaja is a fugitive on these charges as well as a December 2019 indictment charging him and others in the District of Columbia with campaign finance violations and obstruction of justice. A fourth defendant, Rudy Dekermenjian, 45, of Glendale, Calif., pleaded guilty in a related case to wire and bank fraud conspiracy and alteration and falsification of records in September 2020 and is awaiting sentencing.
According to the charging documents, Rountree and Diab worked at Allied Wallet, Inc., a payment processing company headquartered in Los Angeles that served merchants doing business over the internet. Khawaja was Allied Wallet’s owner; Diab was its Chief Operating Officer; and Rountree was Vice President of Operations. Allied Wallet obtained for its merchant clients the ability to accept debit and credit card payments over global electronic payment networks run by Visa, Mastercard, American Express and Discover, among other card brands. Allied Wallet served as an intermediary between its merchant clients and financial institutions that were members of the card brand networks (acquirers). Wells, through his company, Priority Payout, introduced merchant clients seeking payment processing to Allied Wallet.
Rountree and Diab admitted that they engaged in a scheme allegedly with Khawaja, Wells, and others to fraudulently induce acquirers, card brands and banks that issued payment cards to consumers (issuers) to process prohibited or high-risk transactions, and to process transactions for merchants that were terminated for fraud, chargeback or other compliance concerns, by knowingly misrepresenting the types of transactions the merchants were processing and the true identities of the merchants. According to the charging documents, the defendants and their co-conspirators allegedly accomplished the scheme through, among other steps, 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 transactions. Through the scheme, the defendants and allegedly their co-conspirators caused issuers and acquirers, some of which were federally insured financial institutions, to transfer more than $150 million in payment card transactions using more than 100 sham merchant accounts.
The charge of bank fraud conspiracy provides for a sentence of up to 30 years in prison, five years of supervised release, a fine of $1 million or twice the gross gain or loss, forfeiture and restitution.