Recently, the FTC announced it had filed a motion in the U.S. District Court for the District of Nevada seeking (i) to hold a payment processing company and two individual defendants in contempt for allegedly violating a prior court order, and (ii) to modify the prior final order. Ten years earlier, the same district court had entered a final order resolving allegations that these defendants facilitated a deceptive scheme, resulting in more than $26 million in consumer harm by processing payments through shell corporations and straw owners to help “cover up deceptive conduct and problematic chargeback rates.” The FTC argued the defendants failed to learn from past sanctions and continued to use similar tactics, including processing payments for prohibited merchants, neglecting proper underwriting, failing to monitor merchants who exceeded transaction thresholds, and assisting merchants in evading fraud monitoring programs.

The FTC requested the court grant compensatory relief for consumer harm, including the $52,927,030 processed by the company in a recent criminal fraud scheme. The agency also sought coercive relief to ensure compliance, recommending the appointment of a receiver to oversee operations, purge prohibited merchants, and enforce proper underwriting and monitoring. Finally, the FTC asked the court to modify the original order to permanently ban the responsible individuals from payment processing work and require ongoing oversight of the company to prevent future violations.