U.S. Attorney Dana J. Boente announced Tuesday a former employee of Smith Associates pleaded guilty to participating in a fraudulent credit card scheme that targeted Internet services businesses.
Twenty-eight-year-old Gustavo Carvajal of Coral Springs, Florida was employed with Smith Associates from June 2014 to May 2015. Smith Associates mostly operated out of a Margate strip mall, targeting people who had tried to create an online business and incurred thousands in credit card bills in the process, according to court documents.
Smith Associates promised to help those people win refunds of the money they spent, while trying to set up an online business. Even though the company represented itself as a law firm, the company did not employ any attorneys and never conducted any arbitration on behalf of its clients. Instead, the company filed chargebacks on behalf of their clients, by submitting false documents to credit card companies.
Clients were not told that Smith Associates would be committing fraud on their behalf. The company also utilized spoof phone numbers to contact the credit card banks and impersonate their clients.
When the client received a refund, Smith Associates took 40 percent of it. Over the course of the conspiracy, Smith Associates defrauded over 10 Internet businesses on approximately $9.5 million.
Carvajal faces a maximum 5-year prison sentence. His sentencing is scheduled for January 25, 2018.