PAYVISION and its US court cases (Scammers and their bankers PART II)

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Payvision and its US Court Cases

PAYVISION and its US court cases (Scammers and their bankers PART II)

We have been doing a deep-dive investigation in PAYVISION B.V. Amsterdam’s business activities. PAYVISION B.V. is a 100 per cent subsidiary of one of the world’s most reputable banks ING Groep N.V.

We know that PAYVISION served scammers like Gal BARAK and Uwe LENHOFF wilfully, as described in our article here.

PAYVISION was busy doing business with other high-risk merchants in the Porn and the gaming business, too. And recently, we learned that PAYVISION is a defendant in some U.S. court cases initiated by U.S. high-risk merchants.


PAYVISION´s involvement in U.S. court cases

As of July 28, 2020, a legal dispute started at the United States District Court of Nevada (Case 2:20-cv-01405-JCM-VCF) between Beyond Wealth PTE LLC, UTAH (“Beyond Wealth”) – a U.S. MLM company –  and T1 Payments LLC – its presumed U.S. Payment Facilitator regarding T1Payment’s withholding a termination amount of more than 4 Mio USD. As of August 24, 2020, PAYVISION B.V., Amsterdam (“PAYVISION) shows up in the claim as a Counterclaim-Defendant.

Beyond Wealth[3] claimed that T1 Payments LLC (“T1 Payments”) in its claimed capacity as a Payment Facilitator[4] lured them into a Merchant Service Application and Card Payment Processing Agreement in May 2020 by representing that it will provide them with bonafide and honest payment processing services.

Only weeks later, the contractual relationship went sour. Beyond Wealth found T1 Payments was not at all a registered Payment Facilitator and T1 Payments’ ability to process Beyond Wealth’s transactions was dependent upon PAYVISION B.V.’violation of Card Brands (i.e., Visa and Mastercard) regulation. Beyond Wealth claims that T1 Payments is guilty of illegal access device fraud, wire fraud, bank fraud, money laundering, and unlicensed money transmission according to an unlawful conspiracy with PAYVISION in Europe.

The legal claim describes in great detail how PAYVISION processed all transactions of Beyond Wealth (a U.S. company)  by creating a subaccount for Beyond Wealth under T1 Payments’ master merchant account. There was no contract between Beyond Wealth and PAYVISION, so T1 Payments held a merchant account under his name with PAYVISION. PAYVISION deposited the processed funds directly with the T1 Payments bank account with Atlanta Bank.

Beyond Wealth claims that T1 Payments, a U.S. company with operations exclusively in Nevada, purposefully set up the U.K. shell companies T1 Payments Ltd (T1U.K..) and TGlobal Services Ltd (TGlobal).   These European shell companies enabled T1 Payments to process virtually all the merchant transactions it sponsors through an undisclosed European acquirer. PAYVISION  only contracted with T1UK or TGlobal, UK.

Beyond Wealth LLC was also asked to create a shell company, Beyond Wealth U.K.. to board Beyond Wealth’s business with PAYVISION. So, although the customer payment processing agreement (CPPA) was a direct agreement between T1 Payment LLC and Beyond Wealth LLC, T1Payment submitted the transactions under the U.K.. entity’s name. This approach is a clear violation of Card Brand Rules.

According to the claim, T1Payments operates an incorporation formation service for its high-risk merchants. T1Payments supposedly is setting up U.K. entities for an additional fee of USD 250 as a condition to open a merchant account with T1Payments.

T1Payments contracts with merchants under T1 Payment’s name but processes the transactions through PAYVISION according to agreements with T1UK or TGlobal.

PAYVISION does this even though T1UK and TGlobal are officially dormant companies claiming years to have only GBP 1 in assets.[5] The reason for this procedure is that according to Mastercard Rule 7.1. and 7.13 any service provider’s – specifically, a Payment Facilitator’s – location must be within the acquirer’s jurisdiction. Beyond Wealth claims that by procuring U.K. shell companies for Beyond Wealth and other non-UK and non-EU merchants, T1 Payments has conspired with PAYVISION to create the appearance that such merchants were in the U.K. or the E.U.. and thus were eligible for domestic payment processing. Card Brand Rules bar T1 Payments undisclosed E.U acquirers and payment processors from opening accounts for Beyond Wealth and those merchants.

Beyond Wealth pretends in its claim that the procedure to set up U.K. shell companies is described as a standard operating procedure in T1 Payment’s onboarding instructions, the MSA, and related Materials disseminated to its partners and its merchants in the ordinary course of business. The materials even discuss the possibility that merchants need to procure an “EU Corp” in addition to the merchants’ actual corporate form.

This procedure straightforward qualifies as credit card laundering[6] that violates U.S. federal regulations. It represents an unlawful practice to circumvent card brand monitoring programs that prevent consumers and law enforcement detection. Besides, it violates Dutch law, as PAYVISION cannot offer its licensed services to U.S. customers.

Beyond Wealth alleges that T1 Payments depends on this same structure to offer all its U.S. merchants processing services.   Tens of millions of dollars have been flowing from PAYVISION’s bank account in Europe to T1 Payment’s bank account in the U.S., with T1 Payments forwarding the money to T1 Payment’s merchants throughout the United States.

By knowingly allowing T1 Payments to onboard merchants under an aggregated merchant account held in T1 Payment’s name, without T1 Payments being registered as a Payment Facilitator, PAYVISION would have conspired with T1 Payments. Beyond Wealth claims that PAYVISION would have participated in, promoted, facilitated, and aided and abetted that conduct while generating substantial fees.

PAYVISION did not verify that T1 Payments were operating a bona fide business and did not verify that T1 Payments complied with applicable law and were registered with the Cards Associations.   So PAYVISION violated Mastercard Rules.


The PACER records show some similar cases against T1 Payments

A short screening of the PACER records indicates that there have been dozens of similar legal claims against T1 Payments in former years. These legal claims did not prevent PAYVISION from doing business with this company.

With doing business with T1 Payments already since 2015 and 2016[7], PAYVISION  knows these legal claims.   Vantiv, for example – a U.S. leading payment processor – filed a lawsuit against T1 Payments as of March 14, 2017, in the United States District Court for the Southern District of Ohio for breach of contract and fraud. VANTIV alleged that T1 Payments not only breached its agreement with Vantiv but also made up fictitious entities to defraud Vantiv. It stole money from merchants by employing a scheme to divert funds to T1 Payments bank accounts that should have gone to the merchants. In February 2017 – upon learning of the fraud – Vantiv promptly terminated the relationship with T1 Payments and caused T1 Payments to de-register with the Cards Associations as a Payment Facilitator[8]. PAYVISION did not have these issues with the practices of T1 Payments and continued to do business with them.

An acquirer must not accept and submit transactions into Interchange from merchants, Payment Facilitators, or sponsored merchants outside the acquirer’s jurisdiction. As a Nevada based company, T1 Payments is only eligible for sponsorship as a registered Service Provider by an acquirer based in the United States.


PAYVISION denies any wrongdoings

As of November 9, 2020, PAYVISION filed its reply to the court (Document 103-2), confirming that PAYVISION only does business in Europe under Dutch law and complies with all Brand rules.

  1. The Chief Risk Officer of PAYVISION Maria Alida Johana Ruijters – Terprstra confirmed that PAYVISIONB.V.. has never sold or distributed any products or services into the State of Nevada, mainly arguing that the Nevada Court lacks jurisdiction over PAYVISION.
  2. In the court documents provided by PAYVISION, it gets pretty clear that PAYVISION has had a close relationship with T1 Payments and itsU.K.. shell companies for many years. PAYVISION tries to prove its claims with an excerpt of its internal documents showing the British T1 payment companies as customers. PAYVISION did not explain why all the transactions shown on these internal documents in Europe are denominated in USD.

 

[1] Case 2:20-cv-01405-JCM-VCF United State District Court: T1 Payments LLC, Nevada vs BEYOND WEALTH PTE LLC, UTAH and PAYVISIONB.B.. a Dutch limited company as Counterclaim-Defendants. Fraudulent business practices dated 08/24/20

[2] Case 2: 16-cv-00739-JAD-PAL United State District Court: Atlantic Pacific Processing Systems INC vs Dermarketive (and T1 Payments LLC, Nevada)

[3] Beyond Wealth is a company that sells various products through the multilevel marketing model (“MLM”).

[4] Sometimes, Acquirers may contract with third-party organizations to provide processing related services (referred to in the Mastercard rules and hereafter as “Program Services”) to merchants under the acquirers’ sponsorship with the Cards Associations (such third party organizations ere referred to in the Visa rules as “Third-party Agents” and in the Mastercard rules and hereafter as “service providers”). A Service Provider may perform only the type of Program Service it is registered to conduct and must be registered with the Cards Association before an acquirer or merchant may use its services (see, e.g. Mastercard Rule 7.2 (The Program and Performance of Program Service).

Mastercard Rule 7.2.1 (Customer Responsibility and Control): The acquirer must at all times be entirely responsible for and must manage, direct and control all aspects of its Program and Program Service performed by Service Providers, and establish and enforce all program management and operating policies per Card Association Rules. An acquirer must not transfer or assign part of its responsibilities or in any way limit its responsibility about any of its Service Providers. An acquirer must conduct meaningful monitoring of its Service Providers to ensure ongoing compliance by its Service providers with Card Associations rules.

A payment facilitator enters into contracts with acquirers to provide payment services to merchants, and it enters into a separate agreement with each merchant to enable payment acceptance. When a cardholder makes a purchase, the merchant routes the transaction data for processing through the payment facilitator’s master merchant account. A payment facilitator enters into contracts with acquirers to provide payment services to merchants, and it enters into a separate agreement with each merchant to enable payment acceptance. When a cardholder makes a purchase, the merchant routes the transaction data for processing through the payment facilitator’s master merchant account.

[5] Compare Companies House register

[6] Processing one company’s transactions through another company’s merchant account. Credit card laundering may involve opening a merchant account through a “straw” company or may also be accomplished by aggregating transactions from other companies and processing them through a single “funnel account” held in the name of the ISO, as happened here. The Department of Treasury’s Financial Crimes Enforcement Network (“FINCEN”) regards such activities as a variation of money laundering.

[7] According to the declaration made by Maria Alida Johanna Ruljters-Terpstra (Filed 11/09/20 in Case 2.20-cv-01405

[8] Public available