Key player in Operation Choke Point leaves DOJ, joins law firm

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A Department of Justice lawyer who played a key role in the Operation Choke Point saga has moved into private law practice.

Michael Blume, the former head of the DOJ’s consumer protection branch, joined the New York office of Venable LLP as a partner.

During his tenure at the Justice Department, Blume oversaw Choke Point, a controversial effort aimed at reducing consumer fraud by pressuring banks to cut off certain merchants’ access to the U.S. payment system.

The colorfully named operation was launched in early 2013. It initially made a big impact, as banks that had received Justice Department subpoenas scrambled to reduce their potential legal exposure.

“All signs indicate that Operation Choke Point is having an unprecedented effect on banks doing business with illicit third-party payment processors and fraudulent merchants,” Blume wrote in a September 2013 memo.

“We believe we already have denied fraudsters access to tens, if not hundreds, of millions of dollars from consumers’ bank accounts, and that amount will increase daily and indefinitely.”

But as more time passed, Choke Point sputtered in the face of opposition from critics, including congressional Republicans and various industry groups.

The payday lending industry, which had been targeted by the Justice Department as a sector where consumers might be vulnerable to fraud, launched a particularly fierce counterattack.

Blume’s last day at the Justice Department was June 8. Venable, which announced his hiring Monday, touted his experience in food and drug law, advertising and marketing, and financial services.

Earlier in his career, Blume served as an assistant U.S. attorney in the Eastern District of Pennsylvania, and as an aide to former Pennsylvania Sen. Arlen Specter.

“With a combination of Washington know-how and experience handling consumer fraud issues, Michael will be a valuable addition,” Michael McLaughlin, a Venable partner in charge of the firm’s New York office, said in a press release.

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Law and regulation Consumer lending MSBs Payment fraud Payday lending DoJ