June 20, 2019 / 9:35 PM / in a month

U.S. charges four ex-executives at Canadian payments firm PacNet with fraud

(Reuters) - The U.S. Department of Justice on Thursday announced criminal charges accusing four former executives of the Canadian payment processor PacNet Services Ltd of running an international mail fraud scheme that cheated U.S. victims out of tens of millions of dollars a year.

PacNet’s founder Rosanne Day, 51, and her colleagues Robert Paul Davis, 63; Genevieve Renee Frappier, 49; and Miles Kelly, 55, were accused in a 41-count indictment of helping make the Vancouver-based company the “payment processor of choice” for fraudulent mass mailers around the world.

Prosecutors said that for more than two decades, PacNet knowingly acted as a middleman for scammers that misled victims, including many who were elderly or “vulnerable,” into thinking they would receive prizes or other valuable items in exchange for making payments.

They said the scheme also proved lucrative for Day, who founded PacNet in 1994 and led its Vancouver headquarters, and Davis, who ran its office in Shannon, Ireland, saying they each made about C$15 million in salary and bonuses from 2013 to 2015.

The defendants were each charged with 34 mail fraud counts, five wire fraud counts, conspiracy to commit mail fraud and wire fraud, and conspiracy to commit money laundering. Prosecutors said each charge carries a maximum 20 years in prison.

Lawyers for the defendants could not immediately be identified. A lawyer representing PacNet in civil proceedings in Vancouver did not immediately respond to requests for comment.

The office of U.S. Attorney Nicholas Trutanich in Las Vegas, where the indictment was filed, did not immediately respond to a similar request.

PacNet stopped offering payment processing in September 2016, when U.S. authorities designated it a “significant transnational criminal organization,” froze some of its assets, and filed related criminal and civil charges against various other defendants. The designation was removed in October 2017.

The case is U.S. v. Day et al, U.S. District Court, District of Nevada, No. 19-cr-00155.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown

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