BOSTON, Massachusetts – A woman and another man from Logan have pleaded guilty to tricking banks into processing more than $150 million in credit and debit card payments on behalf of merchants involved in prohibited and high-risk businesses, including online gambling, debt collection, debt relief, online drug sales and short-term loans.
Amy Rountree, 41, and Mohammad “Moe” Diab, 48, of Glendale, California, pleaded guilty to one count each of conspiracy to commit bank fraud before U.S. District Judge Nathaniel M. Gorton. The court postponed acceptance of guilty pleas from Rountree and Diab until their sentencing hearings, which are scheduled for November 19 and 20, 2024, respectively.
Rountree and Diab were charged along with two co-defendants: Thomas Wells, 77, of Martin County, Florida, and Ahmad “Andy” Khawaja, 52, of Los Angeles, California. Wells pleaded guilty to conspiracy to commit wire fraud in October 2021 and is awaiting sentencing. Khawaja is a fugitive on those charges, as well as a December 2019 indictment accusing him and others in the District of Columbia of violating campaign finance laws and obstruction of justice. A fourth defendant, Rudy Dekermenjian, 45, of Glendale, California, pleaded guilty in a related case to conspiracy to commit wire and bank fraud and altering and falsifying records in September 2020 and is awaiting sentencing.
According to the indictment documents, Rountree and Diab worked at Allied Wallet, Inc., a Los Angeles-based payment processing company that served merchants conducting business over the Internet. Khawaja owned Allied Wallet, Diab was its chief operating officer, and Rountree was vice president of operations. Allied Wallet provided its merchant clients with the ability to accept debit and credit card payments through global electronic payment networks of Visa, Mastercard, American Express, and Discover, as well as other card brands. Allied Wallet acted as an intermediary between its merchant clients and financial institutions that were members of the card brand networks (acquirers). Wells, through his company Priority Payout, referred merchant clients seeking payment processing to Allied Wallet.
Rountree and Diab admitted that they allegedly participated, along with Khawaja, Wells, and others, in a scheme to fraudulently induce acquirers, card brands, and banks that issued payment cards to consumers (issuers) to process prohibited or high-risk transactions and to process transactions for merchants whose contracts had been terminated due to fraud, chargebacks, or other compliance concerns by knowingly misrepresenting the nature of the transactions the merchants were processing and the merchants’ true identities. According to the charging documents, the defendants and their co-conspirators allegedly implemented the scheme by, among other things, creating shell companies, designing fake websites that purported to sell low-risk retail and household goods, and using industry-standard codes that miscategorized the true nature of the transactions. As part of the scheme, the defendants and allegedly their co-conspirators induced impersonators and acquirers, some of which were federally insured financial institutions, to process over $150 million in payment card transactions through more than 100 sham merchant accounts.
The charge of conspiracy to commit bank fraud carries a sentence of up to 30 years in prison, five years probation, a fine of one million dollars or twice the gross gain or loss, and forfeiture and restitution of assets.
