DOJ Pursues Operation Choke Point Against Banks Helping Scammers


The Justice Department is preparing more cases against banks and payment-processing companies as part of a broad federal probe into financial firms that handle payments for alleged scam artists, Attorney General Eric Holder said yesterday, the Wall Street Journal reports. “In the months ahead, we expect to resolve other investigations involving financial institutions that chose to process transactions even though they knew the transactions were fraudulent, or willfully ignored clear evidence of fraud,” Holder said in a video message.

His remarks come amid a backlash by members of Congress and business groups over the probe, which is aimed at shutting down a variety of financial frauds by cutting off their access to banks. The effort is targeting alleged scammers that operate under the guise of selling medical-discount cards, debt-relief offers and government grants as well as some Internet-based short-term lenders. Opponents say the probe is squeezing legitimate businesses. Holder said in the video the aim is to “protect consumers from scam artists and collaborating institutions—in every circumstance and industry.” The probe is called Operation Choke Point.

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