Man indicted in scheme to fraudulently process credit card payments
A man set up an elaborate network of shell companies to trick credit card companies into processing payments for designer drugs, kratom and CBD oil, the U.S. Attorney’s Office for the Western District of Pennsylvania said Tuesday.
U.S. Attorney Scott W. Brady said Lancelot De Montsegur, also known as Patrice Berthome, 38, was among the conspirators involved in the complex scheme. De Montsegur is a resident of San Juan, Puerto Rico, Brady said.
The attorney’s office said at least some of the products were distributed to customers in Western Pennsylvania.
Brady said De Montsegur participated in a conspiracy designed to conceal from the credit card companies the fact that they used their products and services to pay for recreational and designer drugs, kratom and CBD oil, and they subverted the internal controls the credit card companies had in place to detect and prevent this type of activity.
The credit card companies will not allow their products and services to be used to pay for certain activities, including the online sales of recreational and designer drugs, kratom, and CBD oil, Brady said.
Brady said the fraud involved establishing shell corporations and web sites associated with the shell companies that falsely claimed that they sold a product other than designer drugs, kratom or CBD oil. The conspirators then applied for PayPal, Stripe, Square or merchant accounts from the credit card companies in the names of the shell corporations and the fake web sites. Once the accounts were established, they were used to process payments for designer drugs, kratom or CBD oil.
De Montsegur was indicted on charges of conspiracy to commit mail fraud, wire fraud, and bank fraud. If convicted, he faces 30 years in prison and a fine of $1 million.
Madasyn Czebiniak is a Tribune-Review staff writer. You can contact Madasyn at 724-226-4702, firstname.lastname@example.org or via Twitter .