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Ifrah Achieves Speedy Removal from OFAC List for International Payment Processor

Last year, without warning, filed charges, or arrests, prominent payment processor and Ifrah Law client PacNet was targeted by the Treasury Department’s Office of Foreign Assets Control (OFAC), which placed the company on the same list it uses to designate terrorist or organized crime entities like MS-13. An article in The American Lawyer, The Feds Destroyed His Client’s Company—And for What?, describes the case as one of clear government overreach, showing “an ominous willingness by the feds to use this new tool in a way that seems to take it far beyond the original intent, with devastating consequences for the target.”

Reporter Jenna Greene interviewed Ifrah Law founder Jeff Ifrah on defending PacNet, a well-respected company which had been in business over twenty years but eventually collapsed as a consequence of the agency’s unprecedented targeting.  Ifrah Law achieved for PacNet some of the swiftest ever removals from the OFAC list, and continues to represent this client in actions concerning the now defunct company.

As Jeff Ifrah puts it: “Treasury got it wrong…Implicit in the speed that we received the de-listing is recognition that they screwed up.”

Over its decades long history, PacNet serviced over 700 clients ranging from Bloomberg Business Week to the Catholic Archdiocese of Durban. It may also have processed payments from unscrupulous parties, which is what drew the attention of the feds. However, PacNet had always identified and reported questionable transactions, and even hired Deloitte to conduct compliance reviews. As Greene notes: “it’s scary to see what the government was willing to disregard (or never knew) when it decided that PacNet ‘presented an unusual and extraordinary threat to the national economy.’”

Ifrah’s co-counsel, Steven Pelak of Holland & Hart, notes that the actions of OFAC “gravely injured the reputations and lives of numerous innocent persons” and destroyed without basis the business of a long established financial services and payment processing company. He recommends Congressional action to establish more meaningful review of OFAC designations and actions.

Stricter oversight of OFAC designations would better protect payment processors and spare them from what happened to PacNet, an experience The American Lawyer compared to the upside down world of the Queen from Alice in Wonderland: “Sentence first, verdict afterwards.”

For the full article on Law.com, click here (subscription required).

 

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