Florida Man Sentenced to Prison for Role in Scheme to Fraudulently Process Credit Card Payments
PITTSBURGH - A Florida resident has been sentenced in federal court to two years and 10 months in prison and three years of supervised release on his conviction of conspiracy to commit mail fraud, wire fraud and bank fraud, United States Attorney Scott W. Brady announced today.
United States District Judge David Stewart Cercone imposed the sentence yesterday on Gennady Nudelman, 43, of Delray Beach, Florida.
According to information presented to the court, Nudelman participated in a sophisticated fraud scheme related to the fraudulent processing of credit card payments. The credit card companies will not allow their products and services to be used to pay for certain precluded activities, including the on-line sales of pharmaceutical drugs, including drugs that require prescriptions. The defendant participated in the conspiracy designed to conceal from the credit card companies the fact they used their products and services to pay for precluded activities and to subvert the internal controls the credit card companies had in place to detect and prevent this type of activity.
The fraud involved establishing shell corporations and web sites associated with the shell companies that falsely claimed that they sold products other than pharmaceutical drugs or products that violated trademark infringement laws. The conspirators then applied for merchant accounts from the credit card companies in the names of the shell corporations and the fake web sites. Once the merchant accounts were established, they were used to process payments for pharmaceutical drugs or products that violated trademark infringement laws. Additionally, the conspirators arranged for the credit card statements sent to the consumers to have the names of the shell corporations and telephone numbers. The conspirators set up a telephone bank to receive calls from customers questioning billings on their credit card statements, and the conspirators explained to the customers the true nature of the transactions in hopes of avoiding charge-backs that could cause the credit card companies to question the legitimacy of the transactions. Nudelman operated a business in Florida that specialized in using this complex fraud scheme to process payments primarily for pharmaceutical drugs that required prescriptions, but were sold to consumers in the United States through overseas websites without a prescription.
Assistant U.S. Attorney Brendan T. Conway prosecuted this case on behalf of the government.
U.S. Attorney Brady commended the Food and Drug Administration – Office of Criminal Investigations, Homeland Security Investigations, Pennsylvania State Police and United States Postal Inspection Service for the investigation leading to the successful prosecution of Nudelman.