The Allied Wallet fraud was a payment processing scheme in which the Los Angeles company’s executives knowingly ran credit and debit card transactions for consumer scams and other high-risk businesses that legitimate processors refused to touch. Federal authorities say the conduct helped fraudulent merchants take more than $110 million from consumers and deceived Visa, Mastercard, American Express, and Discover into processing over $150 million in prohibited transactions. The company settled with the Federal Trade Commission in 2019, was wound up in the United Kingdom in 2020, and its founder and CEO, Ahmad “Andy” Khawaja, remains a fugitive in Lithuania.
What Allied Wallet Did Wrong
Allied Wallet operated as a payment gateway and merchant services provider, letting businesses accept card payments online. According to the FTC and the Justice Department, its real edge in the market was onboarding merchants that other processors turned away, then hiding what those merchants actually did.1FTC. Operators of Payment Processing Firm Settle Charges of Assisting Fraudulent Schemes
The merchants named by the FTC included Stark Law, a phantom debt-collection operation; TelexFree, a pyramid scheme; and MOBE and Digital Altitude, two business-coaching programs that falsely promised participants substantial income.1FTC. Operators of Payment Processing Firm Settle Charges of Assisting Fraudulent Schemes To keep those merchants connected to the card networks, the FTC alleged, Allied Wallet executives created fake foreign shell companies, submitted dummy websites and false paperwork to banks, and worked around network monitoring rules meant to flag fraud.
The later federal indictment described the same playbook applied to online gambling, debt collection, debt reduction, prescription drug sales, and payday lending merchants. Prosecutors said the defendants used shell companies, fake retail websites built to look like low-risk businesses, and the deliberate miscoding of transactions under industry-standard merchant category codes.2Department of Justice. Four Charged in Alleged $150 Million Payment Processing Scheme
The FTC Settlement
In May 2019, the FTC announced that Allied Wallet, Khawaja, former Chief Operating Officer Mohammad “Moe” Diab, and former Vice President of Operations Amy Rountree had settled charges that they knowingly processed fraudulent transactions. The Commission voted 5–0 to approve the stipulated orders, which were filed in the U.S. District Court for the Central District of California and entered in early July 2019.3FTC. AlliedWallet, Inc. – Cases and Proceedings
Khawaja and the corporate entities were hit with a $110 million equitable monetary judgment, most of it suspended because of an alleged inability to pay. Khawaja was required to surrender his Los Angeles residence. Diab was permanently banned from the payment processing industry and ordered to pay $1 million. Rountree was subject to a $320,429.82 judgment, suspended due to inability to pay.3FTC. AlliedWallet, Inc. – Cases and Proceedings
Khawaja, the Allied Wallet entities, and Rountree were also prohibited from processing payments for sellers of money-making opportunities and debt collection services, and were required to screen and monitor any other merchant categories they handled going forward.1FTC. Operators of Payment Processing Firm Settle Charges of Assisting Fraudulent Schemes
The Criminal Case
The FTC action was civil. The criminal case followed in 2021. On August 26, a federal grand jury in the District of Massachusetts indicted Khawaja, Diab, Rountree, and sales agent Thomas Wells on conspiracy to commit wire fraud; Diab and Rountree were also charged with conspiracy to commit bank fraud. Wells had steered high-risk merchants to Allied Wallet through his company, Priority Payout.2Department of Justice. Four Charged in Alleged $150 Million Payment Processing Scheme
A fifth defendant, California attorney Rudy Dekermenjian, had already pleaded guilty in September 2020 in a related case. He admitted deceiving Fifth Third Bank into processing over $5.4 million in payments for a high-risk debt-relief client by creating sham merchants and fake websites, falsifying merchant applications during federal investigations, and agreed to forfeit about $20,293 in commissions.4Law360. Calif. Atty Cops to Credit Fraud, Campaign Finance Schemes
Wells pleaded guilty to wire fraud conspiracy in October 2021. In August 2024, Diab and Rountree each pleaded guilty to one count of bank fraud conspiracy.5FDA. Two Plead Guilty to Bank Fraud Conspiracy Targeting Payment Card Industry Rountree was sentenced on December 17, 2024, to time served, one year of supervised release, no fine, and a $100 special assessment.6CourtListener. United States v. Khawaja – Party Information
Diab’s sentencing fell apart twice. Prosecutors initially recommended time served with one year of supervised release, which Judge Nathaniel M. Gorton rejected as too lenient given the scale of the fraud.7Bloomberg Law. Prosecutors Defend Time-Served Plea Deal for Allied Wallet COO A revised December 2024 agreement that added three to six months of home confinement was also rejected.8FindLaw. United States v. Diab After plea negotiations broke down, the court granted a defense motion for Judge Gorton’s recusal in April 2025, and the case was reassigned to Judge William G. Young, who scheduled Diab’s jury trial for September 9, 2025.9CourtListener. United States v. Khawaja – Docket
The Separate Campaign Finance Case
Khawaja faces a second federal case unrelated to payment processing. In December 2019, the Justice Department unsealed an indictment in the District of Columbia charging Khawaja and seven co-defendants, including Lebanese-American lobbyist George Nader, with conspiring to funnel $3.5 million in illegal foreign campaign contributions into U.S. political committees.10New York Times. George Nader and Ahmad Khawaja Charged in Campaign Finance Scheme
Prosecutors said Nader transferred $4.9 million from the United Arab Emirates to the United States under a fabricated software licensing agreement with Khawaja’s company. Khawaja then directed the money into donations, mainly to committees supporting Hillary Clinton’s 2016 presidential campaign. The two used encrypted messaging and the code word “baklava” for campaign contributions.11New York Times. Indictment Details UAE Influence Efforts After the 2016 election, Khawaja made a $1 million contribution to the Trump inaugural committee, which secured his and Nader’s attendance at the January 2017 inauguration.12Department of Justice. Businessman Sentenced in $3.5M Foreign Conduit Contribution Scheme Khawaja was charged with 53 counts, including conspiracy to conceal excessive campaign contributions, wire fraud, and obstruction of justice.13Mother Jones. Who’s Really Behind a $1 Million Donation to Trump’s Inauguration He has denied that Nader provided the funds for the inaugural contribution.
Nader pleaded guilty and was sentenced in July 2023 to an additional year and eight months in prison, consecutive to a five-year sentence he was already serving for unrelated charges in Virginia.12Department of Justice. Businessman Sentenced in $3.5M Foreign Conduit Contribution Scheme Dekermenjian also pleaded guilty in the campaign finance case for creating a fake invoice to disguise Nader’s payments and making donations in his own name using Khawaja’s money.4Law360. Calif. Atty Cops to Credit Fraud, Campaign Finance Schemes Two other defendants in the straw-donor scheme, including Diab, were acquitted by a federal jury in March 2022.14Miami Herald. Allied Wallet CEO Ahmad Khawaja and Political Contributions
Where Khawaja Is Now
Khawaja was arrested in Lithuania in 2019 and released after posting bail of 770,000 euros. He stayed in the country rather than returning to the United States and took up residence in the Stikliai hotel, a luxury property in central Vilnius.15LRT. Despite Millions in Debt, US Fugitive Khawaja Lives in Luxury Vilnius Hotel A federal judge in the United States has declared him a fugitive.2Department of Justice. Four Charged in Alleged $150 Million Payment Processing Scheme
Lithuanian courts have fined him repeatedly for refusing to disclose his assets and income to a court-appointed bailiff. U.S. authorities have formally requested his extradition, and Lithuanian prosecutors confirmed as of mid-2023 that the proceedings were ongoing without providing further detail.15LRT. Despite Millions in Debt, US Fugitive Khawaja Lives in Luxury Vilnius Hotel He continues to fight extradition.
What Happened to the Company
Allied Wallet’s UK entity, Allied Wallet Limited, stopped operating in 2019. In June of that year, the Financial Conduct Authority imposed a requirement barring the firm from conducting any regulated activities or disposing of its assets. Joint provisional liquidators from BDO LLP were appointed by the High Court in August 2019, and on March 20, 2020, the High Court ordered the company wound up following an FCA application.16FCA. Allied Wallet Limited – Statement UK Companies House still lists the company’s status as “Liquidation,” with BDO LLP managing creditor claims.17Companies House. Allied Wallet Limited – Company Information
The U.S. entities, AlliedWallet, Inc. and GTBill, LLC, are subject to the 2019 FTC permanent injunction and monetary judgment. The Allied Wallet website has remained online in recent years, but no public evidence suggests the company is actively processing payments anywhere.