DOJ Investigating 15 Banks for Fraud


DOJ Investigating 15 Banks for Fraud

The US Department of Justice has commenced criminal and civil investigations into at least 15 banks and payment providers as a component of a broad consumer fraud probe, information disclosed on Thursday by a congregational committee showed.

In a probe dubbed “Operation Choke point”, which commenced more than a year ago, US prosecutors will be seeking to end fraud by pursuing financial institutions that utilize money for a number of suspect transactions, Reuters reported.

The Oversight Committee of the House of Representatives released on Thursday documents that showed the DOJ had on-going criminal investigations on four payment providers, one bank and a number of officials since November 2013.

A memo from the DOJ that was part of the documents disclosed showed that the department was separately looking into at least 10 lenders and payment processors as provided for under a civil fraud law.

Maame Ewusi-Mensah Frimpong of the DOJ’s civil division stated in the memo that because of the investigations, some banks had halted payment processing for firms or individuals the institutions suspected of being involved in fraudulent activities against customers.


“We believe we already have denied fraudulent merchants access to tens, if not hundreds, of millions of dollars from consumers’ bank accounts, and that amount will increase daily and indefinitely,” Frimpong stated in the DOJ memo dated November.

In January 2014, the DOJ secured a $1.2 million settlement with Four Oaks Fincorp Inc, a North-Carolina-based small lender, after the bank was accused of facilitating transactions worth $2 billion for a payment provider that had ties with allegedly fraudulent merchants, according to the Wall Street Journal. The settlement was reaffirmed by a federal judge in April.

However, House Republicans took issue with the way the DOJ probe was carried out. They accused the Justice Department of executing a shadowy attempt to take business away from companies that operated legally.

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To contact the reporter of this story; Yashu Gola at