(Adds statement by U.S. Rep. Issa)
By Aruna Viswanatha and Emily Stephenson
WASHINGTON May 29 U.S. prosecutors have opened
criminal and civil probes into at least 15 banks and payment
processors as part of a wide-ranging consumer fraud
investigation, according to documents released on Thursday by a
The Justice Department's investigation, known as "Operation
Choke Point," is more than a year old and aims to crack down on
fraud by going after firms that handle and move money for
various suspect businesses.
According to documents released on Thursday by the House of
Representatives' Oversight Committee, the DOJ had criminal
probes open of four payment processors, one bank and several
officials as of November 2013.
The department had separate investigations into at least 10
banks and payment processors under a civil fraud law, according
to a memo from a DOJ official that was included in the
Maame Ewusi-Mensah Frimpong, an official in the DOJ's civil
division, wrote in the memo that the probe had already caused
some banks to stop processing payments for entities the firms
believed could be involved in fraud against consumers.
"We believe we already have denied fraudulent merchants
access to tens, if not hundreds, of millions of dollars from
consumers' bank accounts, and that amount will increase daily
and indefinitely," Frimpong said in the November memo.
House Republicans, including oversight panel leader Darrell
Issa, see the investigation differently. They say the DOJ has
conducted a shadowy effort to put firms with legal activities
out of business by pressuring banks to stop working with them.
"Operation Choke Point is the Justice Department's newest
abuse of power," Issa said in a statement released with the
documents. "If the administration believes some businesses
should be out of business, they should prosecute them before a
judge and jury."
DOJ spokeswoman Emily Pierce said in an email that the
department only investigates firms that break federal laws.
"When financial institutions choose to process transactions,
even though they know the transactions are fraudulent or are
willfully ignorant of that fact, they are breaking federal law
and we will not hesitate to hold them accountable," she said.
(Reporting by Aruna Viswanatha and Emily Stephenson; editing by
Susan Heavey and Matthew Lewis)