A Glendale lawyer pleaded guilty Wednesday to attempting to obstruct a federal probe and conspiring to defraud a bank into processing more than $5 million in credit and debit card payments.
Rudy Dekermenjian, 42, pleaded guilty in federal court in Washington, D.C., to one count of conspiracy to commit wire fraud affecting a financial institution and bank fraud and one count of alteration and falsification of records, according to the U.S. Department of Justice.
A sentencing date has not yet been scheduled.
Dekermenjian admitted that from 2017 to 2018, while working as the general counsel at a Los Angeles payment processing company, he planned to fraudulently obtain payment processing services on behalf of a merchant providing student loan debt relief services.
According to prosecutors, the company had obtained payment card processing for the merchant from Fifth Third Bank beginning in 2016, but the bank’s risk department terminated the merchant the next year. Following the termination, executives at the payment processing company counseled the merchant to re-apply for processing in the names of “sham merchants,” according to the DOJ.
The sham merchants’ applications, backed up by fake websites that purported to sell housewares, jewelry, leather goods and other retail items made it appear to Fifth Third Bank that there was significantly less risk associated with the business. In fact, the sham merchants were fronts for transactions that involved student-loan debt-relief and not retail goods, prosecutors said.
Dekermenjian learned of the scheme shortly after it began, joined the conspiracy and subsequently earned commission payments of about $20,292 on the fraudulently obtained processing, the DOJ said.
The scheme was the subject of two separate federal investigations. In November 2018, a federal grand jury in Boston issued a subpoena to the company for records relating to processing for merchants involved in loans and debt collection and records relating to the creation of merchant websites.
In May 2019, the Consumer Financial Protection Bureau separately issued a civil investigative demand to the company seeking documents relating to the sham merchants used to obtain payment processing for the student loan debt relief merchant.
Dekermenjian admitted in his plea to falsifying and altering the sham merchant applications in June 2019 with the intent to obstruct those investigations. The company subsequently produced Dekermenjian’s altered and falsified documents to the CFPB, according to the DOJ.