Florida Man Pleads Guilty to Payment Processing Fraud Conspiracy
Department of Justice
U.S. Attorney’s Office
District of Massachusetts
FOR IMMEDIATE RELEASE
Wednesday, October 13, 2021
BOSTON – A Florida man pleaded guilty today in federal court in Boston in connection with a scheme to deceive banks and credit card companies 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, payday lending and online pharmaceuticals among others.
Thomas Wells, 74, of Martin County, Fla., pleaded guilty to conspiracy to commit wire fraud. U.S. District Court Judge Nathaniel M. Gorton scheduled sentencing for Feb. 23, 2022. Wells was charged along with three others on Aug. 26, 2021.
Wells was the owner of Priority Payout, an independent sales organization based in Florida, whose clients included merchants engaged in prohibited or high-risk transactions and merchants that had already been terminated from card payment processing networks such as Visa and Mastercard for fraud, chargeback, or other compliance concerns. Wells referred merchant clients of Priority Payout seeking payment processing services to Allied Wallet Inc., a payment processing company that obtained for its clients access to services that enabled them to accept debit and credit card payments over global electronic payment networks run by Visa, Mastercard, American Express and Discover, among others (card brands) and served as an intermediary between its merchant clients and financial institutions that were members of the card brand networks (acquirers).
Wells engaged in a scheme to defraud several acquirers, the card brands and others of money and property by knowingly misrepresenting that his merchant clients were engaged in the sale of low-risk retail goods to obtain debit and credit card payment processing for those clients from banks and credit card companies and fraudulently inducing them to provide payment processing services to these merchant clients. According to the charging documents, Wells and his co-conspirators accomplished this by, among other means, creating shell companies, designing fake websites that purported to sell low-risk retail goods and using industry-standard codes that miscategorized the true nature of the transactions. Through the scheme, Wells admitted that he personally obtained approximately $700,000 in fraudulent payment card processing proceeds.
The charge of wire fraud conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss, forfeiture and restitution. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney Nathaniel R. Mendell; Assistant Attorney General Kenneth A. Polite of the Justice Department’s Criminal Division; Jeffrey Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division; and Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston made the announcement. Assistant U.S. Attorney Seth B. Kosto, Deputy Chief of Mendell’s Securities, Financial & Cyber Fraud Unit, and Trial Attorney Randall Warden of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Topic(s):
Financial Fraud
Component(s):
USAO - Massachusetts