LOS ANGELES (CN) - The FTC ordered the boss of two credit-card processing companies to pay $328,467 - but suspended its own judgment, subject to conditions.
U.S. District Judge Miranda Du on Jan. 2 issued the stipulated permanent injunction against Jeremy Livingston, individually and as a manager of Blaze Processing and Mach I Merchanting. The order also permanently enjoins Livingston him from providing electronic payment processing services and serving as an information security officer or sales agent for any client - except "for the limited purpose of accepting member dues in a union or bona fide trade association or athletic participation fees."
The suspension will be lifted unless Livingston truthfully, accurately and completely submits financial documentation helping the commission in its investigation against other defendants.
Mach 1 Merchanting and Blaze Processing both operated out of Idaho.
The FTC in July 2014 sued the two companies and California-based Cardflex, which charged a fee to help merchants process credit card transactions.
Also sued were Cardflex president Andrew M. Phillips, Cardflex director John Blaugrund, and Shane Fisher of Mach 1 Merchanting and Blaze Processing.
Du in October ordered Fisher to pay $328,467.23, Blaze Processing $386,131.62 and Mach 1 $270,802.8 as "equitable monetary relief," to settle the FTC case, without admitting guilt.
The FTC claims the defendants arranged unauthorized charges through a "group of interrelated merchants, known as iWorks, to obtain and maintain merchant accounts that enabled iWorks to process unlawful credit and debit card payments through the Visa and MasterCard payment networks."
It accused them of using "numerous tactics that were designed to evade fraud monitoring programs implemented by Visa and MasterCard."
"iWorks operated several related scams in which it lured consumers through websites that purported to offer free or risk-free information about products or services such as government grants to pay personal expenses and Internet-based money-making opportunities," the FTC said in its complaint. "iWorks' websites were replete with misrepresentations about the availability of grants for personal expenses and the likely profitability of the money-making opportunities."
The FTC called the scam "an expensive bait-and-switch."
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