Irish-Canadian payments processor Pacnet says US authorities wiped out its business by wrongfully claiming that the company was laundering money from schemes used to dupe people out of cash.
The US treasury’s powerful office of foreign assets control (Ofac) last year designated Canada- and Shannon-based Pacnet Group as a “significant transnational criminal organisation”, freezing its US assets and barring anyone there from doing business with it.
Ofac confirmed it had dropped Pacnet from its list of transnational crime organisations, ending sanctions against it. But Irish executive Gerry Humphreys declared the company should never have been listed in the first place.
"Our business has been obliterated, and they had absolutely no grounds for designating us. We were never involved in criminal activities," Mr Humphreys said.
More than 120 people, 20 of them in the Republic, lost their jobs as Pacnet, which handled credit and debit card payments and cheques for 700 organisations, was forced out of business.
Its clients included the New York Times subscription service, the Catholic archdiocese of Durban and American Airlines.
Pacnet's US lawyer, Jeff Iffrah, told trade publication the Daily Litigant that the speed at which Ofac had taken the group off its blacklist implied the treasury knew its original sanction had been wrong.
In September 2016, the office originally named 24 Pacnet companies, some based in the Republic, along with 12 people, including Mr Humphreys and in-house counsel Paul Davis, on its list.
The US authorities alleged Pacnet was laundering cash for mail fraud scams such as those where people are asked to pay to process fictitious lottery wins.
Ofac dropped sanctions against most of the individuals early this year and delisted the companies last month. Experts say it normally takes two years for the office to do this.
Pacnet has asked a New York court to hold $5.2 million in clients’ funds, frozen since last year, so customers themselves can apply directly to have it returned to them. Mr Humphreys estimated there is €8 million in all due to larger customers.
Pacnet is not ruling out legal action, although Mr Humphreys acknowledged that taking on any arm of the US government could take a lot of time.
A US treasury spokesman noted that Pacnet had agreed to dissolve all its businesses. He said that, after a review, Ofac had determined that the circumstances surrounding the designation of Pacnet had changed, and that it should no longer be included on the list of criminal organisations.
Ofac sanctioned Pacnet using a powers granted by former US president Barack Obama. Mr Iffrah pointed out that a review by leading judges recommended that those powers be subject to safeguards.
