Attorney General Eric Holder has vowed to continue a wide-ranging credit card fraud probe amid heightened congressional scrutiny and charges that the probe is putting legitimate companies — like gun sellers — out of business.
“In the months ahead, we expect to resolve other investigations involving financial institutions that chose to process transactions even though they knew the transactions were fraudulent, or willfully ignored clear evidence of fraud,” Mr. Holder said in a video message posted online Monday.
Mr Holder said that fraud probe dubbed “Operation Choke Point” is targeting scammers who proffer medical discount cards, debt relief deals and government grants, as well some Internet-based short-term lenders. The aim of the operation is to “protect consumers from scam artists and collaborating institutions-in every circumstance and industry,” he said.
However, Rep. Blaine Luetkemeyer, vice chairman of the House Committee on Small Business, has offered an amendment to the Justice Department’s appropriations bill that would bar funding for Operation Choke Point.
It was matched on the Senate side by Sen. David Vitter, only to be shutdown by Senate Majority Leader Harry Reid last week.
In addition, Sen. Rand Paul has filed an appropriations bill amendment to cut off Mr. Holder’s efforts to shut down gun stores and pay day lenders by drying up their lines of credit.
Operation Choke Point focuses on banks and third-party payment processors, such as PayPal, whose clients include gun merchants, pay day lenders, porn shops and drug paraphernalia stores.
The threat of enforcement has prompted some banks to cut ties with some businesses, even if those companies have valid licenses and good credit histories.