15 Banks and Payment Processors Face Fraud Investigation

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The Justice Department is initiating a consumer fraud investigation by the name of “Operation Choke Point.” Consequently, it has yielded criminal and civil probes by U.S. prosecutors.

The Department of Justice had criminal probes open for four payment processors, one bank, and several officials as of last November, reports Reuters. U.S. prosecutors have begun criminal and civil probes into roughly 15 banks and payment processors over the past 12 months.

Furthermore, a memo from a Department of Justice official says the department had separate investigations focusing on roughly 10 banks and payment processors under a civil fraud law. The goal of the investigation is to tackle fraud by zeroing in on firms that manage and transport money with businesses that seem suspicious.

The initiative is named Operation Choke Point because through stifling those who provide financial services to specific industries, the government can “choke off” the cash needed for these industries to survive. The inability to process payments will cause the businesses to be unable to survive.

Says Reuters, “Maame Ewusi-Mensah Frimpong, an official in the DOJ’s civil division, wrote in the memo that the probe had already caused some banks to stop processing payments for entities the firms believed could be involved in fraud against consumers.”

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