U.S. Prosecutors Pursue Criminal, Civil Probes Against 15 Banks, Payment Processors

Government regulators create laws and initiate investigations in order to protect consumers from an array of hurtful products and companies. One such consumer fraud investigation by the Justice Department is “Operation Choke Point” and it’s resulted in criminal and civil probes by U.S. prosecutors. But some legislators see the investigation as more hurtful than helpful.

According to a report by Reuters, U.S. prosecutors have opened criminal and civil probes into at least 15 banks and payment processors as part of “Operation Choke Point” over the last year.

The investigation aims to crack down on fraud by going after firms that handle and move money with suspect businesses.

As of November 2013, the House of Representatives’ Oversight Committee reported that criminal probes had been opened regarding four payment processors, one bank and several officials. Additionally, civil fraud law investigations were opened against at least 10 banks and payment processors.

An official with the Justice Dept. wrote in a memo to the Oversight Committee that the investigation had already caused some banks to stop processing payments for firms believed to be involved in fraud against consumers.

But that has some congressional members unhappy, saying the Justice Dept. conducted a shadowy effort to put firms with legal activities out of business by pressuring banks to stop working with them, Reuters reports.

“Operation Choke Point is the Justice Department’s newest abuse of power,” Rep. Darrell Issa, Oversight panel leader said in a news release. “If the administration believes some businesses should be out of business, they should prosecute them before a judge and jury.”

A spokesperson for the Justice Dept. maintains that the department only investigates firms that break federal laws.

“When financial institutions choose to process transactions, even though they know the transactions are fraudulent or are willfully ignorant of that fact, they are breaking federal law and we will not hesitate to hold them accountable.”

U.S. probing 15 banks, payment processors for fraud [Reuters]

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