US investigates ‘transnational criminal firm’ in Co Clare

An international "payments processing company" with an office in Shannon, Co Clare, has been labelled a "significant transnational criminal organisation" by the US treasury.

PacNet Services is said to have a long history of involvement in money laundering for various scams that target elderly and other vulnerable people.

The US department of the treasury’s office of foreign assets control (OFAC) set out allegations against the company, which it said knowingly processes payments on behalf of a wide range of mail-fraud schemes targeting US and other victims.

Investigators have set their sights on a global network of 12 individuals and 24 entities across 18 states, including Ireland, for “materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of PacNet”.

Authorities released detailed information on those linked to the Irish outfit, including four “leadership” names and addresses in the Shannon and Limerick areas.

One of those, based in Limerick, participated in the “couriering of bulk cash within Europe” andis listed as a director of several related Irish entities.

OFAC acting director John E Smith alleged the company had "knowingly facilitated the fraudulent activities of its customers for many years".

“Today’s designations are aimed at shielding Americans and the nation’s financial system from the large-scale, illicit money flows that are generated by these scams against vulnerable individuals,” he said in a statement.

PacNet in Ireland has not responded to requests for comment.

Documents released stated that in 2002 two PacNet entities in Ireland and Canada admitted to the US district court in Washington their use of mail to market lottery related materials in the country.

It said two named executives pledged “that in the future they would not use the mail to process payments for illegal lottery purchases”.

Despite this, it continued, “PacNet continues to knowingly process checks on behalf of numerous companies that are actively involved in widespread mail fraud campaigns”.

One such continuation was named as the “Maria Duval” psychic scam in North Dakota.

“Although PacNet eventually refunded the money to the victims, [IT]continued to process transactions for the Duval scheme for over five years.”

In 2014 the company received subpoenas from Iowa relating to the “victimisation of the elderly” and others by fraudsters identified as PacNet clients.

Investigation

OFAC co-ordinated the move on PacNet with the consumer protection branch of the US department of justice and the US postal inspection service.

As part of its efforts against mail fraud, the US department of justice is to announce criminal actions; execute search warrants in several US locations; file civil injunctions against multiple mail-fraud services providers, and seize a PacNet bank account.

PacNet, which is registered in Canada, also has operations in the UK, and subsidiaries or affiliates in 15 other countries.

It is the third-party payment processor of choice for “perpetrators of a wide range of mail-fraud schemes”, OFAC alleged.

The authorities said US consumers receive tens of thousands of fraudulent lottery and other mail-fraud solicitations nearly every day, containing misrepresentations designed to victimise the elderly or otherwise vulnerable individuals.

“PacNet has a nearly 20-year history of knowingly processing payments relating to these fraudulent solicitation schemes, which result in the loss of millions of dollars to US consumers,” alleged OFAC.

It said that in a typical scenario, scammers will mail fraudulent solicitations to victims and then arrange to have victims’ payments (both cheques and cash) sent directly or through a partner company to PacNet’s processing operations.

Victims’ money, minus PacNet’s fees and commission, are made available to the scammers through wire transfers from the PacNet holding account and by PacNet making payments on behalf of the scammers, thereby obscuring the link to the scammers.