February 8 2017
A new form of online fraud called transaction laundering (TL) is infecting the medical, pharmaceutical, and financial payment infrastructures. TL is a new way to launder money on the internet, when legitimate merchants process payments, typically using a credit or debit card, on behalf of another merchant. However, credit card brand associations consider TL a crime whether or not the merchants are aware of the illicit transactions.
This past year, a New York based specialty pharmacy named MOMS, meant to provide medications and support services to patients with HIV. In reality, this pharmacy was secretly providing expired or fake HIV medication. The scheme was complex, and involved several players and shell companies to function. The MOMS episode in TL was discovered and prosecuted. The perpetrators in the pharma-fraud saga were found guilty of several charges, including first and second degree counts of money laundering.