Payment Processing & Finance Law

In September 2016, the U.S. Treasury Department Office of Foreign Assets Control (OFAC) announced it had designated Ifrah Law’s client, a legitimate international business, as a transnational criminal organization. Our client had conducted its business for decades without incident, providing payment processing solutions for direct mail, eCommerce, gaming, charitable, and other customers.

The OFAC designation of a legitimate business was the first of its kind, having been previously limited to terrorist and organized crime entities, such as the Yakuza, MS-13, and Saddam Hussein. The designation indicated that OFAC was expanding its authority under its legal mandate. Given the novelty of this designation, the company contacted Ifrah Law based on our background and extensive experience representing payment processors: understanding their business was critical to our ability to combat the Government’s misperceptions about the payment processing business.

First, we began an internal investigation. As the OFAC designation was a surprise to the company, and the Treasury Department had no obligation to explain the basis for the designation, we needed to determine why our client had been targeted.

We also needed to address the reverberating effects of the designation on our client. An OFAC designation results in the prohibition of U.S.-based businesses including banks from working with a designee. Our client lost the ability to pay employees, vendors, and general expenses and eventually was forced to close its operations.

Ifrah Law achieved some of the swiftest ever removals from OFAC’s SDN list, including all of the 12 individuals named. One year after the initial listing, OFAC finally signed an agreement to remove our client’s companies, officers and employees from the SDN List. We continue to represent this client in actions concerning the financial situation of the now defunct company, and to ameliorate the damage caused by the listing on both individual and corporate reputations. Our work on this case was featured in The American Lawyer.

When the U.S. government pushed Frederick O’Meally, the former Prudential Securities Inc. broker pushed back – and won.

Ifrah Law acted as co-lead counsel in obtaining a jury verdict, rejecting claims by the U.S. Securities and Exchange Commission that O’Meally defrauded 60 mutual fund companies. The jury also rejected the SEC’s negligence claims with respect to 54 of the funds and found only that O’Meally was negligent in his conduct with respect to six of the funds.

Mr. O’Meally had fought the SEC for eight years, claiming his innocence and sticking up for his rights. The SEC asserted that the mutual fund companies had tried to prevent O’Meally from market timing on behalf of his clients, and that he had continued doing so through deception involving multiple account numbers and numerous financial advisor identifying numbers used in trades. But after a four-week trial, the jury found that the defendant did not commit any intentional fraud against the mutual fund companies. Evidence at trial showed that O’Meally had not misused these tools and that, in fact, all of his trading practices had been approved multiple times by his supervisors, by Prudential Securities lawyers and compliance personnel, and even by outside regulators.

The O’Meally case was one of the very small number of SEC compliance cases that go to trial each year, and one of an even smaller number of cases in which a jury has completely rejected SEC claims of fraud. While Prudential Securities and a number of other brokers targeted by the SEC negotiated settlements, Ifrah Law was part of the team that helped Frederick O’Meally vindicate his claims that he was innocent of the SEC’s fraud accusations.

(Securities & Exchange Commission v. O’Meally, No. 06-Civ-6483 (LTS) (S.D.N.Y.), No. 13-1116 (2d Cir.) )

Ifrah Law represented a former Homestore.com executive, Stuart Wolff, who was indicted for securities fraud. During a six-year battle with the U.S. Attorney’s Office for the Central District of California, the trial and appellate teams worked together to secure a reversal of the client’s conviction and a new trial.

In the months leading up to the second trial, the defense team, which included Jeff Ifrah of Ifrah Law, leveraged irregularities with discovery to obtain dismissal of all charges related to PricewaterhouseCoopers, Homestore’s former accounting firm. As a result, the sentence on remand was reduced by 70 percent relative to the sentence imposed after the first trial.

Jeff Ifrah was the only attorney Mr. Wolff retained from the beginning of the case to its conclusion. Mr. Ifrah began managing the legal team after the first trial, continued through the appellate process, and also in the team’s preparation for trial on remand.

Jeff Ifrah was responsible for formulating and executing the strategy that resulted in the 70 percent reduction of Mr. Wolff’s sentence.

(U.S. v. Wolff, Case No. 2:05-cr-00398 (U.S. District Court, Central District of California))

Unikrn, an international leader in eSports products and content, asked us to provide legal
advice on various new products, including its initial coin offering: we provided strategic advice
on the products and games on which the cryptocurrencies could be used, while remaining
compliant with U.S. gaming and financial services regulation on the federal and state level. We
also worked closely with Unikrn during all phases of development of their product, including
revisions to the product and games, updates to the ICO whitepaper, and various regulatory and
compliance strategies. We continue to advise Unikrn on various new gaming offerings and are
advising on licensing matters in newly opened sports betting markets.