Merchant credit card fraud can lead to criminal charges for bank fraud, identity theft, computer crimes, wire fraud, and a host of other federal and state offenses. Merchant account fraud routinely involves multiple parties participating in a conspiracy to improperly obtain credit card information or to make false charges. Anyone involved in any part of the conspiracy can face charges for all criminal acts done in furtherance of the plan.
Federal penalties for merchant credit card fraud can result in lengthy prison terms. It is important to talk to an experienced New York criminal defense lawyer for help understanding legal options available when faced with merchant credit card fraud charges.
Merchant Credit Card Fraud Schemes
Merchant credit card fraud schemes can range from the simple to the complex. In the most basic of fraud cases, someone working for a store or a restaurant records the account information of customers.
Account information can be recorded manually, can be captured using skimming devices attached to card readers, or can be captured using mobile card readers that copy data from the card’s magnetic strip. Once the card information is obtained, it can be transferred or sold. It can be used for online purchases or magnetically encoded onto fake credit cards and fake ATM cards that are used to shop or withdraw funds.
Fake Merchant Accounts
Merchant account fraud can also involve more complex scams as well. Bust-out merchant scams are one of the most common approaches to credit fraud cases . Generally, a fake company is created that appears legitimate and the fake company applies for credit card processing abilities. After a credit card processor approves the fake merchant account, the “merchant” begins to process transactions with stolen credit card data or with fraudulent accounts. The merchant may:
- Process transactions online using stolen credit card information.
- Open up lines of credit using fake or stolen identifies and run transactions with the lines of credit.
- Partner with consumers who provide their card information for a portion of the profits but then tell their bank the transaction was fraudulent
- Set up a false storefront, accept customer payment for goods and not provide goods
- Run transactions in a leased store front and then disappear.
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Merchants may sometimes borrow the names of existing businesses to run fraudulent transactions. Impersonating an existing company makes it possible to quickly set up accounts with merchant processing providers to begin running transactions with stolen card information.
Penalties for Merchant Card Fraud
Penalties vary depending upon the type of merchant card fraud. While local law enforcement investigates most basic identity theft and credit card theft cases, federal authorities generally prosecute cases involving schemes to commit merchant card fraud. In February of 2013, for example the Federal Bureau of Investigation arrested 3 people for allegedly participating in a $200 million merchant card fraud scheme.
Defendants can be charged by the federal government with:
- Wire fraud (18 U.S. Code Section 1343)
- Bank fraud (18 U.S. Code Section 1344)
- Identity theft (18 U.S. Code Section 1028)
- Fraud related to access devices (18 U.S. Code Section 1029)
- Computer fraud offenses (18 U.S. Code Section 1030)
- Money laundering (18 U.S. Code Section 1956)
Often, a single offense results in multiple criminal charges. Playing any role in a merchant credit card fraud scheme can also result in defendants being charged with all underlying criminal offenses under federal conspiracy laws.
Money laundering can result in 20 years imprisonment, while wire fraud and bank fraud each carry a potential sentence of 30 years incarceration. Fines for money laundering may be as much as $500,000 or twice the value of the total money laundered. Fines for wire fraud and bank fraud can reach $1 million. The government can seize assets, freeze accounts, and subject you to criminal and civil forfeiture.
Getting Help with Merchant Credit Card Fraud Cases
If you are accused of merchant credit card fraud, you need to respond in a strategic way and make informed choices about defenses, plea negotiations, and immunity agreements. For help with your case, contact an experienced New York City criminal defense lawyer with a background representing clients facing federal charges for merchant card fraud.