Trump donor helped fraudsters, offshore bettors through Malta ‘friendly banks’

Allied Wallet ‘guided dubious businesses past the gates of the banking system’

An American businessman who has made multimillion-dollar political donations, first to Hillary Clinton and then to Donald Trump, was exposed yesterday by The Associated Press (AP) as having run a shifty business aiding fraudsters and offshore bettors.

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 to route customers’ credit card purchases to banks. Recently Khawaja has shared that wealth in the form of multimillion-dollar political donations, first to Hillary Clinton and then to Donald Trump.

His company, Allied Wallet, helped businesses create dormant shell corporations in the United Kingdom to access its network of friendly banks from Malta to Macau, records obtained by the AP show.

Then it coached clients on how to curate their websites to fool investigators performing compliance checks for banks and credit card companies, the documents reveal.

“Remove the video of the woman being tortured in the top left corner of the home page,” Amy Ringler, the company’s vice president of operations, wrote to one pornography client in October 2012, noting the video would violate Mastercard’s standards.

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 behaviour — Allied Wallet would sometimes simply shift the account to a new institution to start afresh. In exchange, Allied Wallet charged hefty rates and fees as a processor of last resort for especially risky clientele, the records show.

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 innocuoussounding 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.

Thousands of internal company documents obtained by the AP reveal that 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.”

The Los Angeles-based company’s actions in these cases flout bank policies, credit card network rules and potentially US laws designed to prevent money-laundering. In one instance, a company official complained to Khawaja that a colleague had provided “specific instructions on how to set up and operate an illegal gaming operation online.”

Khawaja and a company lawyer didn’t address a detailed list of questions from the The Associated Press about Allied Wallet’s business, as well as Khawaja’s political giving. In a statement this week, its marketing director, AJ Almeda, said: “Any accusations of illicit or prohibited activities are misleading and categorically false.”

He called the AP’s reporting “a political hit job due to the Allied Wallet’s contribution to President Donald Trump’s inauguration and support of his tax cut agenda.”

In 2010 Khawaja and Allied Wallet gave up $13 million earned from processing for illegal poker sites in a civil forfeiture after an FBI investigation into online gambling.

That hasn’t stopped Washington from accepting his political generosity.

In all, Khawaja, his company and its executives have contributed at least $6 million to politicians and political organizations since late 2015, according to an AP review of disclosure reports.

That’s what happened with Allied Wallet customer Stark Law LLC of Chicago, a sham law firm and aggressive debt collector that threatened tens of thousands of Americans into giving them money — often for payday loans they never even signed up for.

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 one-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.

When a risk analyst noticed the suspicious activity, Allied Wallet represented that its Stark account was shut down even though the business had simply been shifted to a new account called Rolling Plains Ltd, the records show.

“They never stopped processing,” wrote Tom Wells, an intermediary who brought Allied the Stark accounts in exchange for a percentage of the business in a November 2015 email to Allied Wallet’s chief operating officer. “In fact you made payment to new acct this week.”

Wells hasn’t returned messages seeking comment.

The records show that Allied Wallet also took extraordinary steps to disguise how it processed payments for online gamblers — a bold foray back into an industry that just years earlier had involved Khawaja in an FBI investigation.

Just before Christmas 2012, Allied wallet began working with Jim Humberstone, the head of operations for an online gaming company called GVC Holdings plc, to process Turkish, Mexican and Brazilian gambling transactions through fake e-commerce websites, the records show.

Some of the websites purported to sell text books while others were dedicated to merchandise for pet cats, the records show. The limited liability companies associated with these sites had innocuous sounding names, though incorporation records reviewed by the AP show top GVC employees served as their officers, according to the documents.

Online betting is highly regulated in Mexico and Brazil. In Turkey, it is prohibited altogether; an internal Allied Wallet guide to global casino regulations described it as “very, very illegal” there.

Humberstone and GVC’s head of corporate communications did not respond to emails and phone calls over several weeks seeking comment.

Allied Wallet’s chief operating officer, Moe Diab, said in a brief phone interview that he didn’t know what GVC was and denied the company transacted for it.

“We don’t do gambling at all,” he told the AP, directing further questions to Khawaja and a company lawyer.