A Scottish company has been officially branded part of a "significant transnational criminal organisation" by American authorities in a money-laundering crackdown.
The Payments Factory - registered on Buchanan Street, right in the middle of Glasgow's Style Mile - is the Scottish wing of a global network accused by America's Treasury Department of processing profits from mail frauds.
President Barack Obama in September signed an order seizing assets of the network, called PacNet, and paving the way for sanctions against anybody, including British firms, doing business with it.
This puts its Scottish wing on the same blacklist as global Mafias such as Italy's Camorra, Japan's Yakuza and Mexico's Los Zetas.
American authorities claim PacNet, whose network is based in Vancouver, processed payments for one of the world's biggest scams, a French "psychic" called Maria Duval who targeted vulnerable elderly people in mass but ostensibly personal mailshots offering spiritual insights for cash.
The Americans said the network was also the payment system of choice for other fraudulent schemes. US Attorney General Loretta Lynch said: 'PacNet has a 20-year history of engaging in money laundering and mail fraud, by knowingly processing payments on behalf of a wide range of mail fraud schemes.
Loretta Lynch
PacNet has denied "ever knowingly processing payments for deceptive mailings by any of its clients" and contests its designation as a crime organisation.
Its Scottish wing was formally explicitly designated part of the "significant transnational crime organisation" by the US. So were its two directors, Paul Davis of the Isle of Man, and Italian-born but British resident Raffaella Ferrari. The Payments Factory when it was first created briefly listed PacNet leader Rosanne Day as a director.
An investigation by US broadcaster CNN named lawyer Mr Davis, who is also known as Robert Davis, and Ms Day as the two main players in the PacNet network. US authorities said an Isle of Man airline called PacNetair was used to move large quantities of cash around Europe.
A spokesman for PacNet stressed that the group was fighting to re-establish its good name.
He said: "PacNet categorically denies the false allegations made by the US Government about its payments processing services for direct mailers — a division of the company representing a small percentage of its total revenue and operations.
"The company operates a rigorous compliance and due diligence program and to protect the general public — and itself — from unseemly scam artists, the company has stopped processing payments for direct mail companies altogether.
"Indeed, PacNet has regularly reported suspicious transactions to the Canadian federal government and has consistently cooperated with Canadian, US, and other law-enforcement investigations.
"In fact, the US government has also filed documents in the federal court in the United States demonstrating that PacNet’s systems and controls were actually deceived by direct mailers."
The spokesman added: "Although the current legal situation precludes further commentary, the company intends to vigorously defend itself and restore its excellent reputation."
How US Treasury Department designated Mr Davis
And the same designation for The Payments Factory
US and other authorities have increasingly moved their battle with online and conventional mail scams, such as clairvoyants, to the firms which process their payments.
The Payments Factory is a limited company and was incorporated in 2015. It has only ever issued one set of accounts. These were for a dormant company and therefore contained new record of profits, losses or capital value.
Despite Mr Obama's September order The Payments Factory continues to be regulated by Britain's Financial Conduct Authority, although it is listed as "dormant" on the UK Companies House register of businesses.
The FCA has said it is considering what action to take in respect of companies in the PacNet network after the US crackdown. In a press statement in October the regulator said it was aware of two UK PacNet affiliates which it regulated: PacNet Services Ltd and UK Counting House Ltd.
Roger Mullin MP
In November the authority wrote to SNP MP Roger Mullin, who has been campaigning for reform of Britain's money-laundering regime, saying there were only two entities under its regulation which have been designated in the US as crime organisation. It did not name the two firms concerned.
The Payments Factory is registered by the FCA as a payments services (PSD) agent. Such registration has a fit and proper person requirement. Anybody applying to be a PSD Agent must declare whether they are subject to criminal investigation.
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