Tuesday, May 24, 2011

VERIFONE, HYPERCOM AND INGENICO ABANDON PLANS TO DIVEST POINT OF SALE BUSINESS TO INGENICO FOLLOWING JUSTICE DEPARTMENT LAWSUIT


WASHINGTON — May 20, 2011 VeriFone Systems Inc., Hypercom Corp. and Ingenico S.A. have abandoned plans for Hypercom to divest its U.S. point-of-sale (POS) business to Ingenico, the Department of Justice announced today. Their decision to abandon the divestiture came just one week after the department's Antitrust Division filed a lawsuit to block the proposed acquisition by VeriFone of Hypercom and to block the proposed divestiture of Hypercom's U.S. business to Ingenico. The department's lawsuit to block the overall deal between VeriFone and Hypercom is still pending, and as the companies have publicly reported, the department is in discussions with them to identify an alternative buyer that is acceptable to the department.
"We are gratified that the parties recognized the anticompetitive nature of the agreement and abandoned its divestiture plan promptly," said Christine Varney, Assistant Attorney General in charge of the Department of Justice's Antitrust Division. "Our discussions with the companies will continue as they seek to find an alternative buyer that will resolve the department's antitrust concerns."
POS terminals are used by retailers and other firms to accept electronic payments such as credit cards and debit cards. The three companies manufacture more than 90 percent of all POS terminals in the United States.
The department's complaint alleged that the merger of VeriFone and Hypercom would result in a dominant POS terminal manufacturer that would likely raise prices and reduce innovation, quality, product variety and service. The complaint also alleged that the proposed divestiture to Ingenico did not adequately resolve the competitive concerns raised by the VeriFone/Hypercom transaction.
VeriFone is a Delaware corporation headquartered in San Jose, Calif. VeriFone earned more than $1 billion in worldwide revenues in its last fiscal year, ending in October 2010.
Hypercom is a Delaware corporation headquartered in Scottsdale, Ariz. Hypercom earned more than $450 million in worldwide revenues in 2010.
Ingenico is a French corporation with worldwide revenues in 2010 of more than $1.3 billion.

Adam Atlas Attorney at Law - The Publisher of this blog


Saturday, April 16, 2011

Multi-Billion Dollar Civil Money Laundering And Forfeiture Action Also Filed Internet Domain Names Used By The Poker Companies Seized

April 16, 2011 (New York) PREET BHARARA, the United States Attorney for the Southern District of New York, and JANICE FEDARCYK, the Assistant-Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), announced the unsealing of an Indictment today charging eleven defendants, including the founders of the three largest Internet poker companies doing business in the United States - PokerStars, Full Tilt Poker, and Absolute Poker (the "Poker Companies")- with bank fraud, money laundering, and illegal gambling offenses. The United States also filed a civil money laundering and in rem forfeiture complaint (the "Civil Complaint") against the Poker Companies, their assets, and the assets of several payment processors for the Poker Companies. In addition, restraining orders were issued against more than 75 bank accounts utilized by the Poker Companies and their payment processors, and five Internet domain names used by the Poker Companies to host their illegal poker games were seized.
Manhattan U.S. Attorney PREET BHARARA said: "As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits. Moreover, as we allege, in their zeal
________________
to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. Foreign firms that choose to operate in the United States are not free to flout the laws they don't like simply because they can't bear to be parted from their profits."
FBI Assistant Director-in-Charge JANICE K. FEDARCYK said: "These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck. They lied to banks about the true nature of their business. Then, some of the defendants found banks willing to flout the law for a fee. The defendants bet the house that they could continue their scheme, and they lost."
According to the Indictment and the Civil Complaint unsealed today:
On October 13, 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act ("UIGEA"), making it a federal crime for gambling businesses to "knowingly accept" most forms of payment "in connection with the participation of another person in unlawful Internet gambling." Despite the passage of UIGEA, the Poker Companies, located offshore, continued operating in the United States. In a press release dated October 16, 2006, Absolute Poker announced that the company would continue its U.S. operations because "the U.S. Congress has no control over" the company's payment transactions.
Because U.S. banks and credit card issuers were largely unwilling to process their payments, the Poker Companies allegedly used fraudulent methods to circumvent federal law and trick these institutions into processing payments on their behalf. For example, defendants ISAI SCHEINBERG and PAUL TATE of PokerStars, RAYMOND BITAR and NELSON BURTNICK of Full Tilt Poker, and SCOTT TOM and BRENT BECKLEY of Absolute Poker, arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls. Of the billions of dollars in payment transactions that the Poker Companies tricked U.S. banks into processing, approximately one-third or more of the funds went directly to the Poker Companies as revenue through the "rake" charged to players on almost every poker hand played online.
As alleged in the Indictment, to accomplish their fraud, the Poker Companies worked with an array of highly compensated "payment processors" – including defendants RYAN LANG, IRA RUBIN, BRADLEY FRANZEN, and CHAD ELIE – who obtained accounts at U. S. banks for the Poker Companies. The payment processors lied to banks about the nature of the financial transactions they were processing, and covered up those lies, by, among other things, creating phony corporations and websites to disguise payments to the Poker Companies. For example, a PokerStars document from May 2009 acknowledged that they received money from U.S. gamblers through company names that "strongly imply the transaction has nothing to do with PokerStars," and that PokerStars used whatever company names "the processor can get approved by the bank."
By late 2009, after U.S. banks and financial institutions detected and shut down multiple fraudulent bank accounts used by the Poker Companies, SCHEINBERG and BITAR developed a new processing strategy that would not involve lying to banks. PokerStars, FullTilt Poker, and their payment processors persuaded the principals of a few small, local banks facing financial difficulties to engage in such processing in return for multi-million dollar investments in the banks. For example, in September 2009, ELIE and others approached defendant JOHN CAMPOS, the Vice Chairman of the Board and part-owner of SunFirst Bank, a small, private bank based in Saint George, Utah, about processing Internet poker transactions. While expressing "trepidations," CAMPOS allegedly agreed to process gambling transactions in return for a $10 million investment in SunFirst by ELIE and an associate, which would give them a more than 30% ownership stake in the bank. CAMPOS also requested and received a $20,000 "bonus" for his assistance. In an e-mail, one of ELIE's associates boasted that they had "purchased" SunFirst and that they "were looking to purchase" "a grand total of 3 or 4 banks" to process payments.
The Indictment and Civil Complaint seek at least $3 billion in civil money laundering penalties and forfeiture from the Poker Companies and the defendants. The District Court issued an order restraining approximately 76 bank accounts in 14 countries containing the proceeds of the charged offenses. Pursuant to a warrant for arrest in rem issued by the U.S. District Court, the United States also seized five Internet domain names used by the Poker Companies to operate their illegal online businesses in the United States.
* * *
Defendants CAMPOS and ELIE were arrested this morning in Saint George, Utah and Las Vegas, Nevada, respectively. ELIE will appear later today before a U. S. Magistrate Court Judge in Las Vegas, Nevada. CAMPOS will appear before a U.S. Magistrate
Court Judge in Saint George, Utah on April 18, 2011. Defendant FRANZEN is expected to appear for his arraignment on April 19, 2011 in the Southern District of New York. Defendants BITAR, SCHEINBERG, BURTNICK, TATE, TOM, BECKLEY, RUBIN and LANG are not presently in the United States and have not yet been arrested. The U.S. Attorney's Office for the Southern District of New York is working with foreign law enforcement agencies and Interpol to secure the arrest of these defendants and the seizure of criminal proceeds located abroad. BITAR, TOM, RUBIN, BECKLEY, CAMPOS, ELIE, and FRANZEN are U. S. citizens. A chart identifying each defendant, the charges, and the maximum penalties, is attached to this release.
U.S. Attorney PREET BHARARA praised the FBI for its outstanding leadership in the investigation, which he noted is ongoing. Mr. BHARARA also thanked Immigration and Customs Enforcement's New York and New Jersey offices, and the Washington State Gambling Commission, for their assistance in the investigation.
The matters announced today are being handled by the Office's Complex Frauds and Asset Forfeiture Units. Assistant U.S. Attorneys ARLO DEVLIN-BROWN and NICOLE FRIEDLANDER are in charge of the criminal case, and Assistant U. S. Attorneys SHARON COHEN LEVIN, MICHAEL LOCKARD and JASON COWLEY are in charge of the civil money laundering and forfeiture actions.
The charges contained in the Indictment and Civil Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant Citizenship Residence Age
ISAI SCHEINBERG Canada;
Israel
Isle of Man 64 (est.)
RAYMOND BITAR United States California
Ireland
39
SCOTT TOM United States Costa Rica 31
BRENT BECKLEY United States Costa Rica 31
NELSON BURTNICK Canada Ireland 40
PAUL TATE Isle of Man
RYAN LANG Canada Canada 36
BRADLEY FRANZEN United States Illinois
Cost Rica
41
IRA RUBIN United States Costa Rica 52
CHAD ELIE United States Nevada 31
JOHN CAMPOS United States Utah 57
Count Charge Defendants Maximum Penalties
1 Conspiracy to
Violate Unlawful Internet Gambling Enforcement Act (UIGIEA)
ISAI SCHEINBERG, RAYMOND BITAR, SCOTT TOM, BRENT BECKLEY, NELSON BURTNICK, PAUL TATE, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE, JOHN CAMPOS
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release
2 Violation of
Unlawful Internet Gambling Enforcement Act (UIGIEA) - PokerStars
ISAI SCHEINBERG, NELSON BURTNICK, PAUL TATE, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE, JOHN CAMPOS
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release

Count Charge Defendants Maximum Penalties
3 Violation of
Unlawful Internet Gambling Enforcement Act (UIGIEA) - Full Tilt Poker
RAYMOND BITAR, NELSON BURTNICK, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE, JOHN CAMPOS
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release
4 Violation of
Unlawful Internet Gambling Enforcement Act (UIGIEA) ­ Absolute Poker
SCOTT TOM, BRENT BECKLEY, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release
5 Operation of
Illegal Gambling Business - PokerStars
ISAI SCHEINBERG, NELSON BURTNICK, PAUL TATE, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE, JOHN CAMPOS
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release; forfeiture of proceeds of offense
6 Operation of
Illegal Gambling Business - Full Tilt Poker
RAYMOND BITAR, NELSON BURTNICK, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE, JOHN CAMPOS
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release; forfeiture of proceeds of offense
7 Operation of
Illegal Gambling Business ­ Absolute Poker
SCOTT TOM, BRENT BECKLEY, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE
5 years in prison; fine of $250,000 or twice the gross gain or loss; 3 years supervised release; forfeiture of proceeds of offense
________________
Count Charge Defendants Maximum Penalties
8 Conspiracy to
Commit Bank Fraud and Wire Fraud
ISAI SCHEINBERG, RAYMOND BITAR, BRENT BECKLEY, NELSON BURTNICK, PAUL TATE, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE
30 years in prison; fine of $1,000,000 or twice the gross gain or loss; 5 years supervised release; forfeiture of proceeds of offense
9 Money Laundering
Conspiracy
ISAI SCHEINBERG, RAYMOND BITAR, BRENT BECKLEY, NELSON BURTNICK, PAUL TATE, RYAN LANG, BRADLEY FRANZEN, IRA RUBIN, CHAD ELIE, JOHN CAMPOS
20 years in prison; fine of $500,000 or twice the amount laundered; 3 years supervised release; forfeiture of proceeds of offense

Tuesday, March 29, 2011

Credit Card Class Action Class Action Filed Against Visa, Mastercard, and Leading Banks Over Alleged Price Fixing Conspiracy

VANCOUVER (March 29, 2011) -- Branch MacMaster LLP and Camp Fiorante
Matthews filed a proposed national class action in the British
Columbia Supreme Court against Visa, MasterCard, and several leading
banks. The claim alleges that the credit card giants and banks have
engaged in a multi-billion dollar price fixing conspiracy to increase
or maintain the fees paid by merchants on every credit card
transaction.

When a customer pays with a credit card, Visa and MasterCard take a
percentage fee, along with the card-issuing bank and the company that
processes the payment. That percentage varies depending on what kind
of card is used. Basic cards charge a smaller percentage, while
premium credit cards that offer points and other rewards cost
merchants a much higher fee.

The claim alleges that Visa and MasterCard rules force merchants to
accept every Visa or MasterCard credit card, even if those cards carry
high fees for the merchant. The claim also alleges that these rules
prevent merchants from charging more for payments with premium cards.

Ward Branch, partner at Branch MacMaster LLP said, "The lawsuit
alleges that merchants are forced to raise prices for all customers to
cover the cost of transactions with premium cards. Our research
suggests that these fees cost Canadian merchants $5 billion in 2009
alone. The system is bad for Canadian merchants, Canadian consumers,
and for the Canadian economy as a whole."

The suit follows a filing by the Competition Bureau of Canada, which
seeks to prevent Visa and MasterCard from imposing the rules
preventing surcharges and forcing merchants to honour all cards. This
proposed class action seeks to recover the fees that Visa, MasterCard,
and the banks are alleged to have collected illegally from merchants.

Along with Visa and MasterCard, the suit names BMO Financial Group,
Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Desjardins,
National Bank of Canada, Royal Bank of Canada, Toronto-Dominion Bank,
Bank of America, Capital One, and Citygroup Inc. as defendants.

Thursday, March 17, 2011

Webinar On Canadian Mobile Payments Compliance and AML

 

When
Thursday March 24, 2011, 1:00 PM EST – 2:00 PM EST.

Cost
Free!


›› RSVP 

 

 

Free Webinar:  The legal framework for MSBs doing business in Canada

What's going on?  What's coming next?  And what's different about doing business in Quebec?

New federal and provincial legislation have significant implications for electronic payment companies and other money services businesses (MSBs) operating in Canada or serving clients in Canada.  

Your are cordially invited to attend the a free webinar targeted to helping money services businesses (MSBs) build, improve and shape their regulatory compliance programs – particularly with respect to anti money laundering (AML) and counter terrorist financing (CTF).  This session will focus on the existing requirements, industry trends and emerging Quebec legislation that could change the way you do business. 

Get the facts that you need to keep your business on the right side of the law in Canada.

This event features Matthew McGuire and Adam Atlas.

Matthew McGuire is the president of Williams McGuire AML Inc., largest dedicated anti-money laundering consulting practice in Canada.  Matthew and his team have assisted countless MSBs operating in Canada.  Their experience runs the gamut from AML compliance effectiveness reviews to conducting MSB screening on behalf of a financial service provider.  Matthew is widely recognized in financial and academic circles as one of Canada's top experts in AML and CTF.  Find out more about Williams McGuire AML Inc. at www.amlcompliance.ca.

Adam Atlas is a lawyer specializing in mobile money companies.  His firm, Adam Atlas Attorney at Law is a boutique commercial law firm dedicated to top-tier personal service to clients. He is licensed to practice law in both the Canadian province of Quebec and New York state.  Adam has a unique specialization in electronic transaction law and has been widely published on related topics.  Find out more about Adam Atlas at www.adamatlas.com.

RSVP at https://www2.gotomeeting.com/register/345803611

Please note, space at this by invitation-only event is limited. 

We look forward to (virtually) seeing you there.

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Friday, January 7, 2011

NXGEN Appoints Randy Tillim as Director of Major Accounts

January 2011, Whitefish, MT – NXGEN Payment Services, a leading Merchant Service Provider (MSP) for Elavon Global Payment Solutions, operating in USA, Canada, UK, and Italy, has appointed Randy Tillim as Director of Major Accounts.  Mr. Tillim will be responsible for all the business development, sales, and marketing targeted at merchants processing more than a billion dollars per year in credit card volume.  In his position, Tillim will report directly to the President, Giuseppe Caltabiano.

 

"Randy has already been instrumental to NXGEN's growth by both helping acquire large businesses as well as helping in the design of the NXGEN's exclusive tool for controllable downgrades, MerchReport.com" said Giuseppe Caltabiano. "I am thrilled to be able to offer Randy's expertise, together with the support of the team he brings, to all of NXGEN's sales force"

 

"I look forward to continuing to build on NXGEN's success in this highly demanding marketplace," states Tillim. "By working with Elavon's National Accounts team, and with the availability of NXGEN's products and tools, we will be able to reduce the costs of processing to our large prospects by an average of 20 to 50 basis points on their Visa, MasterCard and Discover processing per year.  This can translate into millions of dollars of previously unrealized profit."

 

Any ISO or individual sales rep in USA can have access to Mr. Tillim's team, NXGEN's pricing and services, and MerchReport.com; Any ISO or individual sales rep will now

be able to have a team behind when trying to make a bid for very large accounts

 

About NXGEN Payment Services
NXGEN, a global provider of credit card processing in the United States, Canada, United Kingdom and Italy, is the top MSP for Elavon Global Payment Services through USBank.  NXGEN's mission is to increase the level of professionalism in the Payment Services Industry while providing merchants with the next generation of products at the most competitive prices - Acting locally while thinking globally!

 

MerchReport.com developed by NXGEN provides detailed interchange processing reports for high volume customers (>$1 million/month).  The downgrade reporting provides a valuable tool for customers by identifying quantifiable savings opportunities that they can monitor and control.  It is useful in tracking transactions, training store managers to reduce expenses on their processing costs and saving the organization money.

 

The goal of NXGEN is to set the standard for value and service through timely innovation and a company-wide commitment to each and every merchant. By consistently focusing on these goals, NXGEN continues to pursue our vision to be the global leader in the payment processing industry.