Brazzers, which is owned by Mansef Inc., set up an Atlanta company last year called Premium Services Inc. to facilitate payments from Mansef’s third-party credit card processors into the accounts and to allow the company to remit funds out of two checking accounts to its U.S. vendors, the company said in court papers filed last week.
But authorities claim in the suit filed at U.S. District Court in Atlanta that Premium Services was not registered with the federal Treasury Department nor with the Georgia Department of Banking and Finance as a money-transmitting business.
The government noted that Premium Services has no known office building nor employees and operates at a mail drop called The Mail Room.
Federal authorities say in the complaint that for three months last year Premium Services received $9.4 million in wire transfers from various sources and that much of the funds originated overseas in countries such as Israel, considered by law enforcement to be at high risk for money-laundering activity.
U.S. authorities claim that $6.4 million in the two accounts is forfeitable under 18 U.S.C. § 981 (a)(1)(A) as property involved in or traceable to a transaction in violation of 18 U.S.C. § 1960, which prohibit’s unlicensed money-transmitting buinesses.
In exhibits provided by the government, some of those Israel-based processors transacting business with Premium Services included Paygea Ltd., CAL-International, Mizrahi Tefahot Bank Ltd. and Israel Discount Bank Ltd., whose subsidiary Israel Credit Cards-Cal Ltd. was levied a $13.5 million fine in November by VISA Europe over chargebacks.
The U.S. Attorneys Office, which is trying the case, was unavailable for comment on Monday due to the President’s Day holiday. Authorities typically rely on Bank Secrecy Act reports and record-keeping requirements to provide a paper trail for investigations of financial crimes and illegal activities, including tax evasion, embezzlement and money laundering,
Susan Ross, a Los Angeles litigator who represents Mansef, did not immediately return XBIZ calls on Monday for inquiry.
In court papers, Mansef and Premium Services claim that the two bank account were at the behest of Mansef.
“Premium Services is not a money-transmitting business as defined in federal or Georgia state law and so it is not required to be licensed or registered as such,” a motion filed last week said. “There are no allegations, in this or any other forum, that the adult entertainment provided by Mansef is anything other than lawful and legitimate.
“The government bases its entire complaint on the unsupported leap that Premium Services, because it has bank accounts into which it received deposits and from which it made disbursements, is an unlicensed money-transmitting business.”