29
May

Operation Choke: 10 Civil Investigations Opened

Operation Choke Point continues to create controversy. Legitimate businesses are being attacked by the Obama administration. Having experienced difficulty in shutting down small dollar credit lenders directly, the administration is targeting vendors and processors who “enable” lenders to serve their customers.

By Alan Zibel and Andrew R. Johnson
The U.S. Department of Justice has opened at least 10 civil and criminal investigations into whether banks and payment processing firms helped enable fraudulent activity, according to an internal Justice Department memo viewed by The Wall Street Journal.

More than 850 pages of internal documents on the DOJ’s probe of alleged fraud in the financial industry were obtained by the House Oversight and Government Reform Committee.

The panel has been conducting an inquiry into the federal probe known as “Operation Choke Point,” which is aimed at reducing the ability of fraudulent businesses to operate by going after financial firms–like banks and payment processors–that help move their money.

The memos viewed by the Journal detail last year’s launch of the sweeping probe, which resulted in the government issuing subpoenas to about 50 banks and six payment processing firms, according to a November 2013 memo by DOJ official Maame Ewusi-Mensah Frimpong.

Ms. Frimpong, in her memo, wrote that the government had the opened civil investigations into 10 banks and payment processors and was in settlement talks with three of them.

The DOJ has also opened criminal investigations of four payment-processing firms as well as one criminal investigation of a bank “and responsible bank officials.”

The names of affected banks were… Read More.

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