Below are the InterNic records for Charter Pacific Bank's would be partners:
MerchantOnLine.com 1600 S Dixie Highway Boca Eaton, FL 33432 US Domain
Name: MOLEMAIL.COM 800-316-1936 Fax- 561-482-5253
thebigbulls.com World Wide Corporate Financial 15760 Ventura Blvd.
Suite 1020 Encino, CA 91436 US
Charter Pacific Bank 30141 AGOURA ROAD AGOURA HILLS, CA 91301 US
This case just keeps on going and going.
Charter Pacific Bank and Friends
Taves et al (see Operators) were aided in this endeavor by the actions of
Charter Pacific Bank (San Fernando Valley, California, see InterNic entry).
According to an LA Times story reporting on FTC investigations (Jeff Leeds,
9/11/99) CP Bank sold Ken Taves about 900,000 (90%) "of the credit card
numbers that he allegedly used to run up $45.7 million in mostly bogus
charges against consumers worldwide". [12]
Apparently the bank made millions processing credit card transactions for
adult industries. In addition to numbers harvested from the adult
entertainment business, they also sold numbers from the two-third of the
bank's 250 merchant accounts belonging to other merchant accounts including
mail-order firms and retailers.
This bank has had a shady past, and it's not alone. In the words of an
industry insider:
.. the focus should be on the banks or other card processing companies
that willingly deal with the 'adult content' companies that are home to card
fraud.
... [a 1990 investigation by a reputable bank found] a loosely connected
ring of operators that, contrary to their documents submitted to open their
accounts, were actually in porn & related businesses. This was sufficient
reason for us to sever the accounts, but in the process of this
investigation we discovered that their real business was processing
fraudulent charges ... Even then their pattern was to open and close
accounts frequently ... the law enforcement folks advised that even the
business we were dealing with were really fronts for ... organized crime.
This Taves fellow is a carbon copy of several we uncovered. He probably
gets a cut of the cash but most of it passes on to others offshore. As noted
in one of your hyperlinks, the FTC has only been able to trace a small
amount of the $45mm.
In summary, it is the bank processor that makes this whole thing work ---
they are like the air supply to a scuba diver. The card issuing bank is not
the bad guy. Virtually every bank in the country has safeguards in place to
prevent them from finding themselves in business with these types of
operators. Charter Pacific Bank has knowingly chosen to get in bed with
these folks ... the reason naturally is money. Your typical local merchant
pays a discount in the area of 2%. I'll bet these guys are paying Charter 5
to 8%.
Charter Pacific's history is particularly interesting. Again, from the same
source:
The LA Times article was factually incorrect when it states that the bank
was under an order to tighten controls as a result of bad real estate loans.
In fact it was under a FDIC cease and Desist Order owing entirely to its
Bank Card operation ... Interestingly, it was lifted in March of this year
without comment by the bank as to what it had done to satisfy the many
requirements.
This past week the bank's CEO issued a letter to shareholders regarding
the LA Times article and TV coverage.... Interestingly, he did state that
"other news stories may appear" as sort of a forewarning. I reviewed the
bank's press releases and noticed that in August they were in the final
stages of getting approval to move the Bank Card operation to a separate
subsidiary. Undoubtedly they view this as a way to get better treatment from
the regulators. For one, it will get the oversight away from the FDIC which
only covers state chartered banks. Non-bank subsidiaries are covered by the
Fed or OCC, I don't recall which.
Also this past week the bank issued a joint press release with a company
called MerchantOnLine.com wherein they would be offering state of the art
merchant services to online businesses. Since I know how careful banks are
(or should be) in choosing partners, I decided to do a bit of digging. WOW!
I wouldn't issue these guys a simple credit card, let alone process their
cards or, heaven forbid, form a business alliance with them. It
[MerchantOnLine.com] is an OTC bulletin board company that became "public"
by means of a hocus pocus process involving a Colorado shell company early
this year. Their reported sales are around $200k per quarter, they operate
at a loss, and have a $400k deficit net worth. ... A typical pattern for
these companies.
After doing some searches, I found that an investment newsletter
thebigbulls.com actually shares the same office and telephone number with
MerchantOnLine.com. Other searches on the internet yielded numerous links
back to MerchantOnLine.com for setting up internet merchant accounts. It
appears that they are nothing more than a marketing operation that
aggregates accounts to presumably be processed by Charter. Applications can
be completed online. They delicately advise that they are specialists in
handling 'off shore transactions', and that everything is "real time". In
other words, "we'll connect you to the credit card processing systems and
you can initiate any sort of charges you wish, and in the blink of an eye
funds will be neatly deposited in foreign accounts."
When I first put this page up I thought that Taves et al were heavy users of
credit card generator technology, or that they had stolen cards back when
Taves worked processing other merchant accounts. It never occurred to me
that a bank would sell Taves credit card numbers, or that US banks would
operate so close to the edge. (It would be interesting to know if this bank
was related to IN DEED INVESTMENTS.)
faughnan.com |
