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:
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.
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.
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