ISO Arrested by FBI
A merchant processing ISO was arrested by federal agents this week for his alleged role in a business loan fraud scheme. Paul Paredes, who owns J&E Business Consulting LLC in Rochester, NY, allegedly used the identities of his merchant processing clients to obtain business loans for himself.
“Small businesses provide J&E with their financial information, such as the owner’s identifying information, including driver’s license, social security number, and email, as well as bank account information,” the Assistant US Attorney said.
According to the complaint, between May and November 2022, Paredes fraudulently submitted approximately 42 loan applications using the identities of approximately 31 individuals, enabling him to obtain millions of dollars. He used the money to pay off one victim, pay other loan companies, and he used it on personal expenses such as credit cards, travel, and vehicles.
Paredes is also facing a related civil lawsuit over the matter. According to public records, his company has also used and defaulted on several merchant cash advances from as far back as 2016 to as recent as this year.
“Although a comprehensive analysis of all known accounts has not yet been completed, the financial transactions in the [bank] accounts appear to be consistent with Paredes laundering the fraudulent loan proceeds obtained from the lender companies, which are proceeds of a Specified Unlawful Activity, namely wire fraud, in a similar fashion to a ‘Ponzi scheme’ and inconsistent with the operations of a legitimate business enterprise,” an FBI agent said in an affidavit.Last modified: October 18, 2023