Payment Processors Allied Wallet, GTBill Settle FTC Charges

WASHINGTON, D.C. – Payment processor Allied Wallet, the company’s owner and two corporate officers have agreed to settle charges filed against them by the Federal Trade Commission in which the FTC asserted they “assisted numerous scams by knowingly processing fraudulent transactions to consumers’ accounts.”

The defendants in the case include Allied Wallet Inc., Allied Wallet Ltd., associated transaction processing companies GTBill, LLC and GTBill, Ltd., the companies’ CEO and owner Ahmad “Andy” Khawaja and corporate officers Mohammad “Moe” Diab and Amy Rountree. While the fact is not referenced in the settlement agreement or the FTC’s announcement thereof, GTBill has handled transactions for adult entertainment industry clients in the past.

In a press release announcing the settlement, the FTC said the defendants “often in close collaboration with FTC scofflaw and Allied Wallet sales agent, Thomas Wells… helped numerous dubious merchants hide their fraud from banks and the credit card networks.”

“The defendants’ deceptive practices included creating fake foreign shell companies to open accounts in their names, submitting dummy websites and other false information to merchant banks, and actively working to evade card network rules and monitoring designed to prevent fraud,” the FTC added in its statement.

Under the FTC’s stipulated final order, which will have the force of law once approved and signed by the District Court Judge hearing the case, the settling defendants are “permanently restrained and enjoined from Payment Processing, and from assisting others engaged in Payment Processing, whether directly or through an intermediary, for any Person… offering to sell, selling, promoting or marketing the following goods or services: Money Making Opportunities; credit repair; credit card protection; identity theft protection; debt collection, debt counseling, debt settlement, or debt consolidation; mortgage or loan modification; government grants; or timeshare resale.”

The order also prohibits the defendants from processing for any person “engaged in outbound telemarketing,” any entity or person listed on the Mastercard Member Alert to Control High-Risk Merchants (“MATCH”) list due to excessive chargebacks or fraud complaints, for a prior fraud conviction, because of laundering, or if they have been identified as a “questionable merchant” according to the Mastercard Questionable Merchant Audit Program, engaged in merchant collusion, handled illegal transactions or committed identity theft.

The order also imposes financial penalties on the defendants – although it appears much of the penalty will be “suspended due to inability to pay” with respect to Khawaja and Rountree.

“The order against Khawaja and his companies, AlliedWallet, Inc., Allied Wallet, Ltd., GTBill, LLC, and GTBill Ltd., imposes a $110 million equitable monetary judgment,” the FTC said in its release. “After Khawaja turns over a residence in Los Angeles, California, the remainder of the judgment will be suspended due to inability to pay. The order against Rountree imposes a $320,429.82 equitable monetary judgment that is suspended due to inability to pay. The stipulated final order against Diab, who was Allied Wallet’s Chief Operating Officer, permanently bans him from payment processing and requires him to pay $1 million to the FTC in equitable monetary relief.”

As detailed in a report by the Associated Press last summer, Khawaja has made large contributions to the campaigns of politicians from both the Democrat and Republican parties, including both Hillary Clinton and Donald Trump.

As is standard in settlement agreements like the one Khawaja and his company has negotiated here with the FTC, the settlement includes language stating that the settling defendants “neither admit nor deny any of the allegations in the Complaint, except as specifically stated in this Order. Only for purposes of this action, Settling Defendants admit the facts necessary to establish jurisdiction.”

At the same time, the defendants have agreed to “waive any claim that they may have under the Equal Access to Justice Act… concerning the prosecution of this action through the date of this order and agree to bear their own costs and attorney fees.”

At the time of the AP report linked to above, Allied Wallet’s marketing director, A.J. Almeda, said that “any accusations of illicit or prohibited activities are misleading and categorically false.”

Image of Andy Khawaja via Allied Wallet company blog