Last year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated the PacNet Group as a significant transnational criminal organization (TCO). PacNet, a prominent global payment processer and Ifrah Law client, was placed on the list without any prior warning, charges or arrests. The American Lawyer, a monthly law magazine published ALM Media, quoted — Jeff Ifrah in an article entitled, The Feds Destroyed His Client's Company -- And For What?.
Legal reporter Jenna Greene interviewed Ifrah on defending PacNet, a well-respected company that had operated successfully for over twenty years before eventually collapsing as a consequence of the OFAC’s unprecedented targeting. Jeff Ifrah achieved one of the swiftest removals to date from the TCO list and continues to represent this client in actions concerning the now-defunct business. Greene described the case as one of clear government overreach, showing “an ominous willingness by the feds to use this new tool [the TCO designation} in a way that seems to take it far beyond the original intent, with devastating consequences for the target.”
With operations in Canada, Ireland and the United Kingdom, and subsidiaries or affiliates in 15 other countries, PacNet was the third-party payment processor of choice for over 700 users, ranging from Bloomberg Business Week to the Catholic Archdiocese of Durban. The sanctions indicated that the company facilitated the fraudulent activities of customers, however, PacNet had always identified and reported questionable transactions. The business even hired Deloitte, a world leading professional services firm, to conduct audits and compliance reviews. As Ifrah states, “The treasury got it wrong. Implicit in the speed that we received the de-listing is recognition that they screwed up.”
Ifrah Law’s co-counsel on the case, Steven Pelak of Holland & Hart, noted that the actions of the OFAC, “gravely injured the reputations and lives of numerous innocent persons.” Without basis, the office destroyed the business of a long established financial services and payment processing company. Pelak further recommended Congressional action to establish a more meaningful review of OFAC designations and actions. “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,” said Greene. In the future, The American Lawyer hopes that other companies will be able to avoid this disaster or others similar, which the publication describes as, “sentence first, verdict afterwards.”
Jeff Ifrah is a nationally recognized litigator and a founding member of Ifrah Law. Ifrah began his career as a trial lawyer and officer in the U.S. Army’s Judge Advocate General’s Corps and as trial counsel to the U.S. Army Communications-Electronics Command at Fort Monmouth before gaining invaluable experience as a special assistant U.S. attorney in the U.S. Attorney’s office in New Jersey. In December of 2015, he was named by the National Law Journal to the prestigious Litigation Trailblazer list, and he has been recognized for six years in a row as one of America’s leading White Collar litigators by Chambers USA.
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