Four individuals have been charged in Massachusetts with conspiring to deceive banks and credit card companies into processing more than $150 million in credit and debit card payments on behalf of merchants involved in prohibited and high-risk businesses, including online gambling, debt collection, debt reduction, prescription drugs, and payday lending, according to an indictment unsealed today in Boston.
Three of the four individuals charged were arrested today. The fourth defendant has not yet been arrested and is a fugitive on separate federal charges.
Ahmad “Andy” Khawaja, 49, of Los Angeles, California, and Thomas Wells, 74, of Martin County, Florida, are charged with conspiracy to commit wire fraud. Mohammad “Moe” Diab, 45, of Glendale, California, and Amy Ringler Rountree, 38, of Logan, Utah, are charged with conspiracy to commit wire fraud and conspiracy to commit bank fraud. Federal agents arrested Diab, Rountree, and Wells this morning.
The indictment alleges that Khawaja, Diab, Rountree, Wells, and others engaged in a scheme to defraud several financial institutions, the card brands, and others of money and property by fraudulently inducing them to provide payment processing services to merchants engaged in prohibited or high risk transactions, and to merchants that were terminated for fraud, chargeback, or other compliance concerns, through knowingly misrepresenting the types of transactions that the merchants were processing and the true identities of the merchants.
The defendants and their co-conspirators accomplished the scheme through, among other steps, creating shell companies, designing fake websites that purported to sell low-risk retail and home goods, and using industry-standard codes that miscategorized the true nature of the transactions.
Through the scheme, the defendants and their co-conspirators fraudulently obtained more than $150 million in payment card processing through more than 100 sham merchants.
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division and Acting U.S. Attorney Nathaniel R. Mendell of the District of Massachusetts made the announcement.
The Food and Drug Administration – Office of Criminal Investigations, U.S. Postal Inspection Service, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations are investigating the case.
Trial Attorney Randall Warden of the Justice Department’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney and Deputy Chief Seth B. Kosto of the Securities, Financial & Cyber Fraud Unit at the U.S. Attorney’s Office for the District of Massachusetts are prosecuting the case.
Related Federal Cases
Key Facts
- State: Massachusetts
- Category: Fraud & Financial Crimes|White Collar Crime
- Source: DOJ Press Release â†â€â€
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