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NYC Merchant Account Fraud Lawyers

By Spodek Law Group | November 13, 2016
(Last Updated On: July 28, 2023)

Last Updated on: 28th July 2023, 07:20 pm

Individuals convicted of merchant credit card fraud may face criminal charges for wire fraud, computer crimes, identity theft, bank fraud and a number of other state and federal offenses. Merchant account fraud typically involves two or more people conspiring to illegally and improperly make false charges or obtain credit card details and other personal account information. Anyone involved at any point during the conspiracy may face criminal acts committed by any member throughout the merchant account fraud scheme.
If convicted, a defendant may face an incarceration sentence, so it is important to seek legal representation from a professional New York criminal defense attorney as soon as possible. He or she will be able to help you understand your legal options if you are facing federal penalties or merchant account fraud charges.
Overview of Merchant Account Fraud Schemes
The severity of merchant account fraud scams ranges from basic to complex. In the simplest of cases, a store clerk or someone working for a restaurant records the account information of the establishment’s patrons.
These individuals may manually record account information, capture information using mobile card readers that copy information from a credit card’s magnetic strip, or capture data using skimming devices attached to the establishment’s credit card readers. Once he or she obtains information, he can transfer it or sell it. The financial data may also be used to make unauthorized online purchases, or the individual may magnetically encode the data onto fake debit and credit cards that he or she can then use to withdraw funds or shop.
False Merchant Accounts
Merchant account fraud may also involve complex schemes. One of the more common approaches to credit fraud include bust-out merchant scams in which an individual creates a fake company that then applies for credit card processing capabilities. After a processor approves the fake merchant account, the “company” begins to process sales and other transactions using fraudulent accounts and stolen credit card data. The fake merchant may:
– Run transactions in a leased storefront and then disappear.
– Set up a fake storefront, accept payments from customers for items and not provide the items paid for.
– Partner with customers who give their debit or credit card information for profits but then turn around and file a dispute with the bank, claiming a fraudulent transaction.
– Take out lines of credit using stolen identities or fake personas and complete transactions once the lines of credit are approved.
– Process online transactions using stolen debit or credit card data.
Merchants may also act as though they are associated with a legitimate, existing business in order to run fake transactions. By impersonating a company, these fraudulent merchants may quickly set up accounts with processing providers to begin running fake transactions.
Merchant Account Fraud Penalties
Depending on the type of merchant account fraud committed, penalties will vary. Federal authorities typically prosecute instances of conspiracy to commit merchant account fraud, while local law enforcement investigates most basic credit card theft and identity theft cases. The federal government may charge defendants with:
– Money laundering
– Computer fraud offenses
– Fraud related to access devices
– Identity theft
– Bank fraud
– Wire fraud
In many cases, a single merchant account fraud offense can result in multiple criminal charges. If a defendant plays a role to any extent in a merchant account fraud scheme, he or she may also face federal conspiracy charges as well.
For instance, bank fraud and wire fraud each carry a possible sentence of up to 30 years in jail, while money laundering carries a 20-year prison sentence. Fines for bank fraud and wire fraud can reach $1 million, and fines for money launderying may be $500,000 or twice the total value of money laundered.The government may also freeze accounts, seize assets and subject the offender to civil and criminal forfeiture.
Get Legal Representation for Your Merchant Account Fraud Case
If you have been accused of committing merchant account fraud, it is critical that you strategically respond and make informed choices about immunity agreements, plea negotiations and defenses. For this reason, it is important to work with an experienced New York criminal defense attorney who can help you determine the best way to proceed. For more information about our legal services or to discuss your case, please call the team at Spodek Law Group, PC today.

The Devastating Impact of Merchant Account Fraud

Imagine having your world turned upside down in the blink of an eye due to a merchant account fraud scam. The impact these criminal acts have on businesses and individuals is catastrophic. This multi-faceted form of financial crime can vary from simple schemes to well-orchestrated, complex operations. Penalties for those found guilty can include lengthy prison sentences, astronomical fines, and other serious consequences. It is crucial, therefore, for those accused of these crimes to seek expert legal representation from a knowledgeable and experienced criminal defense attorney immediately.

Uncovering the Many Faces of Merchant Account Fraud

Merchant account fraud is an umbrella term that encompasses a multitude of schemes and scams. Each one is designed to exploit and manipulate innocent individuals and businesses for ill-gotten gains. Let’s take a closer look at some of these devious tactics used by criminals involved in this heinous activity.

Simple Schemes: Information Theft and Misuse

In these seemingly innocuous cases, unassuming employees at retail establishments, such as store clerks or waitstaff at restaurants, maliciously record patrons’ account information. These unscrupulous individuals may use various methods, including manual notation, mobile card readers, or skimming devices attached to credit card terminals.

Once this valuable information is stolen, it is generally sold or transferred to another party, who then uses it for unauthorized online purchases or encodes the data onto counterfeit debit or credit cards. These fraudulent cards are then used to withdraw funds or make purchases, often leaving the victims financially devastated and facing a long road to recovery.

Complex Scams: The Dangers of False Merchant Accounts

For those seeking the thrill of more elaborate and sophisticated schemes, merchant account fraud also presents intricate, multi-layered opportunities. One such example is the “bust-out merchant scam.” This method involves creating a fake company and applying for credit card processing capabilities. Upon approval, the fraudulent company begins processing transactions, using stolen accounts and credit card data.

False merchants can employ various tactics, including:

– Operating from a leased storefront for a short period then disappearing without a trace
– Setting up a sham online store, accepting payments from customers but never delivering the goods
– Collaborating with customers, who provide their card information in exchange for a share of the profits, then dispute the transactions with their banks
– Applying for and using lines of credit based on stolen identities or fictional personas
– Impersonating real businesses to deceive processing providers and run fraudulent transactions

Confronting the Consequences of Merchant Account Fraud

The penalties for merchant account fraud can be severe, and defendants may face multiple charges for a single offense. Federal authorities typically handle the prosecution of conspiracy cases, while local law enforcement investigates credit card theft and identity theft incidents. A range of significant penalties can be imposed, such as:

– Money laundering: up to 20 years imprisonment and fines reaching $500,000 or twice the value of the laundered funds
– Bank and wire fraud: up to 30 years in prison and fines of up to $1 million
– Computer fraud offenses, fraud related to access devices, and identity theft: various sentences and fines

In addition to these harsh penalties, offenders may have their assets frozen, seized, or subjected to civil and criminal forfeiture.

Defending Your Rights and Reputation

Don’t let your life be defined by a merchant account fraud accusation. Act swiftly and decisively to protect your future. Partner with an established New York criminal defense attorney who understands the nuances of these complex cases and will work tirelessly to help you navigate the challenging legal process ahead. At Spodek Law Group, PC, our dedicated and experienced team are ready to offer you the guidance and support you need. Contact us today for a consultation.

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