http://www.newsday.com/long-island/crime/two-men-from-li-charged-in-credit-card-processing-scheme-feds-say-1.13554836
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Their companies — known as Commerce Payment Systems, Evolution Bankcard and other names, and located in Hewlett according to online listings — serviced up to 12,000 merchant customers and took in $30 million from 2013 to 2015, the government said.
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The scheme, the government said, included false marketing, misrepresentations by CPS sales staff to potential merchant customers and misrepresentations to customers when they called to complain about overcharges. Processors act as middlemen between a merchant, the merchant’s bank, a cardholder, the cardholder’s bank and the credit card company — such as Visa or MasterCard. The majority owner of CPS, the charges said, was a larger processing company.
Mendlowitz and Hart, the government said, charged merchants fees that were “several times higher” than what they were promised during sales pitches, charged duplicate fees multiple times and added in bogus charges such as “IRS reporting fees” and “inactivity fees.” They also manipulated computer images of sales agreements, according to the indictment, so that it appeared to their parent company that customers had initialed and okayed fees that they had in fact been assured would not be charged.
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