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NEW YORK (AP) — One customer was a debt collector that threatened to jail people if they didn’t pay back loans that they never took out. Another was an offshore gambling operation that hid bets behind innocuous-sounding websites, including one dedicated to orange cats. A third was a phone-sex business catering to men with diaper fetishes or fantasies of raping women.

Ahmad "Andy" Khawaja made his fortune in online payment processing for a host of companies, providing a key conduit in e-commerce for "high risk" merchants by helping route customers’ credit card purchases to banks. And recently Khawaja has shared that wealth in the form of multimillion-dollar political donations, first to Hillary Clinton and then to Donald Trump.


But thousands of internal company documents obtained by The Associated Press reveal that Khawaja’s company, Allied Wallet Inc., has profited from guiding dubious businesses past the gates of the banking system. The records, which include email conversations as well as business and financial documents, show Allied Wallet executives helped deploy sham websites and dummy companies to hide these businesses’ tracks, even in cases where Allied Wallet’s own staff deemed the underlying business activities to be "very, very illegal."

This week the Los Angeles-based company’s marketing director, A.J. Almeda, said in a statement that "any accusations of illicit or prohibited activities are misleading and categorically false." Almeda called the AP’s line of inquiry "a political hit job due to the Allied Wallet’s contribution to President Donald Trump‘s inauguration and support of his tax cut agenda."

Nobody in Washington, Democrat or Republican, appears to have questioned how Khawaja earned his money, and what exactly Khawaja might hope to gain from his political giving is not entirely clear. The records reviewed by the AP show that Khawaja has pursued foreign business deals, including an investment by a United Arab Emirates-controlled wealth fund, a prospective deal with an Iranian bank and a potential business arrangement with Lebanon. Some U.S. senators he has supported are on the banking committee, which writes laws governing his industry.

That’s what happened to Mary Liz Nogueras when a Stark debt collector called her at work in late 2015 and threatened to take her to court if she didn’t immediately pay $890 to cover an outstanding payday loan. Nogueras didn’t recall owing any money but was frightened by the collector’s abrasiveness, so she offered up her credit card number over the phone.

A few months later, in March 2016, Federal Trade Commission regulators and Illinois prosecutors charged Stark’s owners with running a massive fraud operation, eventually forcing them out of the debt collection business entirely, issuing a $47 million judgment against them and making them personally forfeit $9 million — along with a 1-kilogram gold bar — to settle the claims.

Eight months before Stark was busted, Allied Wallet set up credit card processing for a web of online merchants that supposedly sold home goods but actually were owned by payday loan-related companies with names like Clearwater Lending, the records reviewed by the AP show. The arrangement included some indications of suspicious activity: The websites lacked inventory, were unable to collect payments and failed to correctly spell words like "towels."

Whenever a bank caught the obvious misconduct, Allied Wallet would shut down the site and notify the bank of its actions — but then route the same payments through a new fake company, the records show. In just one month in late 2015, consumers filed hundreds of fraud complaints with their credit card companies about bills from Stark and a web of other front companies, the documents show.

In October 2015, just three months after Allied Wallet began processing for Stark Associates Ltd., a UK shell company that handled the Stark debt collections, a risk analyst warned Allied Wallet about questionable transactions on the account, examining in detail the sale of a yellow curtain valance supposedly shipped to a nonexistent address: 123 Main Street in Townsville, New York.

Not only had one of the banks processing Stark’s payments — OCBC Wing Hang Bank in Macau — noticed multiple fraud complaints on the account, the analyst wrote, but also the websites on the account itself were fishy, designed exactly like another site that Allied had recently shut down for engaging in "transaction laundering," according to the email.

A month later, the risk analyst followed up with top Allied employees, this time certain Stark was not legitimate: "In case it is of interest to you, we have now received a chargeback case that confirms that the merchant STARK, which you already closed, was indeed misrepresenting its business and offering loan services instead of home decor," the analyst wrote.

Regulators named Gaurav Mohindra as a key player in the Stark debt-collection scheme. He told the AP he had never heard of Allied Wallet. Incorporation records show he was the director of Stark Associates Ltd., the UK corporation Allied Wallet created for the supposed home decor website jvalances.com that was used to disguise Nogueras’ $890 fake debt payment when it was passed along to Visa.

Once websites passed muster, company officials would then route those businesses’ incoming payments to banks willing to accept them. If a merchant racked up too many fraud complaints — or a bank caught on to suspicious behavior — Allied Wallet would sometimes simply shift the account to a new institution to start fresh. In exchange, Allied Wallet charged hefty rates and fees as a processor of last resort for especially risky clientele, the records show.

"Why would anyone use a high priced processor unless they have a questionable product?" the frustrated CEO of an unusual Irish company that specializes in selling phony ATM receipts, forged hotel bills and other fabricated documents wrote in a March 2016 email to company officials. "If I’m going to go to the bother of pretending I am a clean green business, then I’ll use a payment system that gets me more of the money in a quicker manner."

Since then, Khawaja appears to have avoided processing payments for U.S. bettors, the records show. But the documents show that his company has accepted and obscured international business from GVC Holdings PLC, one of the most prominent gambling outfits in the online industry, often in places where online gambling is prohibited or highly regulated.