FOR failing to answer the complaint of First Hawaiian Bank regarding illegal card charges, the federal court entered an order of default against Tianchi Corporation, doing business as Jiuzhou Car Wash, and its operator, Yong Fu Hong.
After an examination of the records and pleadings, Chief Judge Ramona V. Manglona of the District Court for the NMI said Tianchi Corporation “was duly served with the summons and first amended complaint in the manner required by law, and the time for answering having expired without any answer or response being filed or appearance being made, the default of the defendant Tianchi Corporation is hereby entered according to law.”
She issued the order of entry of default on Nov. 26, 2024.
According to the lawsuit, Tianchi Corp. submitted to FHB a merchant processing agreement application.
Tianchi requested that FHB provide merchant services including the provision of a credit/debit card terminal for use by Tianchi at its car wash business on Saipan.
Once its application was approved, Tianchi could swipe customers’ credit/debit cards or insert credit/debit cards into the merchant terminal in order to charge the customers’ credit/debit card accounts for services provided or goods sold to the customers by Tianchi.
FHB would then collect those charges from the issuer of the customer credit/debit cards.
Hong guaranteed the obligations and performance of Tianchi under the agreement with FHB, the lawsuit stated.
Pursuant to the agreement, FHB installed a merchant terminal at Tianchi’s business premises and Tianchi commenced utilizing the terminal to process customers’ credit card and debit card transactions.
Commencing in approximately February 2023, the number and amount of transactions processed through Tianchi’s merchant terminal increased, the lawsuit stated.
It added that FHB began receiving notices of dispute initiated by the issuers of the credit/debit cards purportedly used by their cardholders at Tianchi’s place of business using Tianchi’s merchant terminal.
FHB alleged that the transactions were fraudulent and that the credit/debit cards in question were not or could not have been presented to Tianchi for services rendered or sales made by Tianchi to the cardholders.
To date, FHB has received notices of disputes in the aggregate amount of $117,549.04. FHB has been able to recover certain portions of those funds, but $95,879.01 remains outstanding, its lawsuit stated.
As a consequence, FHB said it has been required to reverse the fraudulent transactions and reimburse the issuers of the credit/debit cards used in the fraudulent transactions.
FHB wants Tianchi and Hong to pay the bank the full amount of its losses resulting from the fraudulent transactions.
FHB filed its lawsuit on Dec. 21, 2023 and subsequently filed a first amended complaint on April 23, 2024.
