First Data, a popular payment processing platform, has agreed to enter into a settlement with the Federal Trade Commission (FTC) for its involvement in four scams and will pay over $40 million in fine.

Per Tuesday’s official announcement, First Data, which is a part of Fiserv, will pay $40 million and Chi “Vincent” Ko, a former executive of the firm, will pay another $270,374, all of which will be used to provide refunds to the consumers.

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Along with the fine, the platform also agreed to improve the screening of its “high risk” merchant clients and hire a monitor for three years.

A major fraud, but neglected by many

Ko’s former company First Pay Solutions was involved in processing transactions of fraudulent merchants from 2012 to 2014.

The platform opened these accounts under false names, processed the payments through hundreds of shell companies, and provided US bank Wells Fargo with deceptive information for opening accounts.

“First Pay’s risk department ultimately failed to effectively screen out deceptive merchant applications submitted by a small set of fraudulent sales agents,” Jim Walden, Managing Partner of Walden Macht & Haran and lawyer for Ko, said.

“That failure caused substantial financial harm to both First Pay and Mr. Ko, who agreed to turn over his entire $100 million First Pay portfolio to First Data in 2014 so that the income could be used to repay consumers harmed by the dishonest activities of these fraudulent agents and merchants.”

Notably, the defendants neither admitted or denied any of the wrongdoings, and Wells Fargo was not named in the allegations.

First Data bought the merchant accounts of First Pay Solutions in May 2015, but allegedly turned a blind eye to all the shady activities. The company also appointed Ko as its vice president of strategic partnerships in January 2017, but he is no longer employed with the firm.

Fiserv bought First Data’s parent company last July in a $29.3 billion deal.