Facts

The Federal Trade Commission filed suit against AlliedWallet Inc., Allied Wallet Ltd., GTBill LLC, GTBill Ltd., Ahmad Khawaja, Mohammad Diab, and Amy Rountree in relation to defendants' management of a payment facilitating and processing business that enabled their merchant-clients to accept debit and credit card payments from consumers.

PLAINTIFF'S CONTENTIONS: The FTC contended that since at least 2012, defendants knowingly processed payments for a number of merchant-clients engaged in fraudulent activities, including some that were subject to law enforcement actions by the FTC, the Securities Exchange Commission, and criminal authorities. Further, the FTC alleged defendants submitted merchant applications containing false information, and worked around card network rules and transaction monitoring designed to prevent fraud with their reseller agents. The FTC claimed defendants' unfair acts and practices allowed perpetrators of scams, pyramid schemes, and unlawful debt collection operations to access the debit and credit card payment system and charge over $110 million to consumer accounts.

DEFENDANTS' CONTENTIONS: Defendants denied the allegations.

Result

The court entered judgment against defendants for just over $110 million, and defendant Khawaja agreed to forfeit his home in Beverly Hills. The remainder of the judgment, outside of Khawaja turning over his home, was suspended due to inability to pay. Additionally, Khawaja, his companies, and Rountree were barred from processing payments for specific types of merchants, and monitoring and screening requirements on their processing of payments for other merchants were put in place. Diab was permanently barred from processing payments. Further, a $320,000 equitable monetary judgment against Rountree was suspended due to inability to pay, while Diab will pay $1 million.