September 17, 2009
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News: First Data Cooperates With Feds
First Data Corporation, a subsidiary of Kravis Roberts & Co. has agreed to cooperate with Denver's U.S. Justice Department in releasing customer information requested by a federal "John Doe Summons." First Data is a global leader that provides credit card payment processing services to more than 5.4 million retail locations worldwide. The company also operates debit card transactions for the STAR Network system. In addition, they service more than 2,000 credit card issuers plus millions of consumers worldwide. Earlier this year, The Department of Justice petitioned a Denver, CO federal court to grant the summons on First Data Corporation so that the Internal Revenue Service (IRS) could gather information. The IRS hopes to discover information leading to the identification of merchants who have set up off shore accounts to funnel funds in an attempt to evade paying taxes. The petition claims that merchants have directed their credit and debit card payment processors to deposit their proceeds into these off shore accounts. First Data is listed as one of those processors. First Data, one of the nation's largest credit card processors, has agreed to comply with the summons only after it had been modified.
According to the summons, the IRS is seeking information from the credit card processor on "U.S. merchants who have established merchant sales agreements with First Data and any of its subsidiaries or affiliates, to process debit card, credit card, charge card or other payment card transactions." The summons is not the first of its kind, last year a federal judge in Miami issued a "John Doe Summons" authorizing the IRS to request information from UBS AG, a Zurich, Switzerland based bank about U.S. taxpayers who may be using Swiss bank accounts to evade federal income taxes.
Virtually every type of business utilizes the services of First Data. In addition to servicing some of the world's most exclusive and largest financial leaders, the company provides payment processing for small mom and pop merchants, government agencies, and businesses of all sizes in between. First Data boasts of their continued investment in technology which positions them as a global leader in the credit card processing industry.