Five Sentenced In Federal Court For Role In Payment-Processing Scheme
SALT LAKE CITY – Five individuals, who conspired to operate a payment-processing scheme for proceeds received by telemarketing call centers and other activities associated with fraudulent telemarketing programs, have been sentenced.
The merchant processing fraud supported telemarketing call centers throughout the country, including a large operation in Phoenix, Arizona. Several fraudulent products were sold through the call centers, including information guaranteeing government grants, business opportunities, and “Amazon rooms and accompanying advertising.”
Chad Gettel, age 43, of Salt Lake City, has been sentenced to seven years in federal prison for the scheme. The sentence will run concurrent to a sentence he received in the CC Brown case. According to federal prosecutors, the payment-processing scheme started while Gettel was on release in the CC Brown case. Gettel has been ordered to pay $558,837.00 in restitution.
Jamie White, age 41, of St. George, and Peter Ian Seldin, age 51, of Miami, Florida, will each serve 36 months in federal prison for their role in the fraud scheme. William B. Rogers, age 39, of Salt Lake City, will serve 12 months in prison. White, Seldin, and Rogers were ordered to pay $32,500 in restitution. Parker Crow, age 26, of St. George, was sentenced to five years of probation and will pay $15,000 in restitution.
To set up the merchant processing accounts, the co-conspirators contacted individuals and convincing them to open Limited Liability Companies (“LLCs”) and bank accounts in those company names in order to obtain the merchant accounts that were used to process the funds from the telemarketing rooms. These individuals are known as nominees because they mask the true nature of the operation that Gettel, White, Seldin and the others conducted on behalf of the partner fraudulent telemarketing operations.
The nominees were told that their business provided merchant processing services to smaller businesses who could not obtain their own merchant accounts. They were never informed that telemarketing was involved nor were they aware that the telemarketing sales were fraudulent.
In furtherance of the scheme, Gettel, Seldin, White and others created the LLCs and fraudulently set up merchant bank accounts through which the telemarketing fraud victims’ payments were processed. In executing the scheme to defraud, and in order to apply for and obtain merchant accounts the defendants created fraudulent documents they called “Creatives.” These documents included fabricated bank statements, profit and loss statements and fabricated and altered invoices. These nominees were unaware of the true purpose, use, and risk of the merchant banking accounts.
The merchant accounts enabled the telemarketers to capture, authorize, and process credit card account transactions; settle credit card transactions pursuant to merchant account agreements; and ultimately receive deposits from settled credit card transactions.
As part of the scheme, Gettel, White, Seldin, Rogers and Crow, along with others, contested charge-backs to these merchant accounts initiated by credit card customers of the telemarketing rooms. Ultimately, banks would freeze merchant accounts and discontinue allowing those accounts to accept credit card payments due to suspicious activity and the large numbers of charge back requests.
The loss to the telemarketing room victims and associated banks exceeded $9 million.
Special agents of the FBI and IRS Criminal Investigation Division investigated the case. The U.S. Attorney’s Office is prosecuting the case.