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Two Charged in Complex Payment Processing Fraud Scheme

OCI BadgeDepartment of Justice
U.S. Attorney’s Office
Western District of Pennsylvania

FOR IMMEDIATE RELEASE
Thursday, March 28, 2019

PITTSBURGH - A resident of San Juan, Puerto Rico, and a resident of Point Roberts, Washington have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy to commit mail fraud, wire fraud, and bank fraud, United States Attorney Scott W. Brady announced.

The one-count superseding Indictment, returned on March 26, named Lancelot De Montsegur, aka Patrice Berthome, 38, of San Juan, Puerto Rico, and Steven Juliver, 54, of Point Roberts, Washington, as defendants.

According to the superseding Indictment, De Montsegur and Juliver were involved in a complex fraud that involved fraudulently processing credit card payments. The credit card companies will not allow their products and services to be used to pay for certain precluded activities, including the on-line sales of recreational and designer drugs, kratom, and CBD oil. De Montsegur and Juliver participated in a conspiracy designed to conceal from the credit card companies the fact that De Montsegur, Juliver and their co-conspirators used their products and services to pay for precluded activities and to subvert the internal controls the credit card companies had in place to detect and prevent this type of activity.

The fraud involved establishing shell corporations and websites associated with the shell companies that falsely claimed that they sold a product other than designer drugs, kratom, or CBD oil. The conspirators then applied for PayPal, Stripe, Square, or merchant accounts from the credit card companies in the names of the shell corporations and the fake web sites. Once the accounts were established, they were used to process payments for designer drugs, kratom, or CBD oil. Additionally, the conspirators arranged for the credit card statements sent to the consumers to have the names of the shell corporations and telephone numbers. The conspirators set up a telephone bank to receive calls from customers questioning billings on their credit card statements, and the conspirators explained to the customers the true nature of the transactions in hopes of avoiding charge-backs that could cause the credit card companies to question the legitimacy of the transactions.

The law provides for a maximum total sentence of 30 years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorneys Brendan T. Conway and Jeffrey R. Bengel are prosecuting this case on behalf of the government.

The Food and Drug Administration Office of Criminal Investigations and Homeland Security Investigations conducted the investigation leading to the Superseding Indictment in this case.

A superseding indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

Topic(s):
Financial Fraud

Component(s):
USAO - Pennsylvania, Western