
IT pros indicted after arranging credit card payments for weed startup - evo_9
https://arstechnica.com/tech-policy/2020/07/feds-indict-men-for-disguising-pot-payments-as-orders-for-dog-toys-and-soda/
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rootsudo
Tl;dr:

1\. Created off shore merchant accounts for credit card processing.

2\. Lied about the product, so it was given a lower processing rate.

3\. Banks processed and did settlement in USA.

4\. Chargebacks most likely led to compliance to look over transactions, when
it's signaled that it was contraband - handed over to legal.

5\. Banks are required to share to USA Govt.

6\. USA Govt intercepts them.

~~~
toomuchtodo
This is just terrible risk management on the part of these technology
practitioners. You don't lie to your financial services providers, you don't
break US federal law, otherwise you go directly to jail if you make enough
noise (~$100M in volume) and transit the jurisdiction.

~~~
curryst
I'm also guessing there's some compliance mess involved. I can't imagine that
all banks have some moral stand on not banking for marijuana businesses.

My guess is that processing charges for them constitutes some from of
"providing banking services for illegal money" since marijuana is still
illegal federally (and most large banks tend to be multi-state).

This is the bank passing the buck on that. "We didn't violate that law, the
customer lied to us."

