A former South Lake Tahoe resident has admitted to participating in a sophisticated payment-processing scheme that federal prosecutors say was designed to deceive banks and help high-risk merchants continue processing transactions.
Thomas Emil Eide, 51, pleaded guilty Aug. 20 to conspiracy to commit bank fraud, according to the U.S. Attorney’s Office for the Eastern District of California. The case is being prosecuted in U.S. District Court in Sacramento under docket No. 26-CR-0109.
Eide was the owner of CB Surety LLC, which prosecutors say served as the vehicle through which the scheme operated. According to court documents, the alleged conduct occurred from approximately March 2017 through December 2023.
Federal prosecutors said Eide and his co-conspirators recruited merchants that could not legally obtain or maintain conventional merchant accounts. Those merchants allegedly included businesses accused of defrauding consumers, selling goods or services that violated state or federal law or banking rules, maintaining excessive chargeback rates, or appearing on a terminated-merchant file.
Sham companies and straw owners
To get around banks’ screening procedures, prosecutors said Eide and his associates established accounts under fake company names.
Individuals were recruited to act as straw owners of those companies and were directed to open bank accounts. The accounts were then made available to merchant clients who otherwise might not have qualified for them, according to the federal government’s account of the case.
The group also allegedly created fictitious websites and contact information to make the companies appear legitimate to financial institutions.
The alleged scheme went beyond simply establishing accounts.
Manipulating chargeback rates
Prosecutors said Eide and his co-conspirators used high volumes of small-dollar transactions, or microtransactions, to artificially reduce the apparent chargeback rates of their merchant clients.
A chargeback occurs when a consumer disputes a transaction and the payment is returned through the banking or card-payment system. A high chargeback rate can cause banks and payment processors to terminate a merchant’s account or impose other restrictions.
According to the government, the small-dollar transactions artificially increased the total number of transactions attributed to merchants. That made the percentage of disputed transactions appear lower than it actually was.
Federal prosecutors said the manipulation helped prevent banks from closing accounts because of excessive chargebacks and refunds.
More than $111 million processed
The scale of the alleged operation was substantial.
Eide and his co-conspirators caused at least $111 million in transactions to be processed for CB Surety’s merchant clients, according to federal court documents. More than $3.3 million of those transactions ultimately resulted in consumer-initiated refunds and chargebacks.
Prosecutors said some of the merchants involved charged consumers for products or services that were unauthorized or were never provided.
The federal government has not alleged that every transaction processed through CB Surety was fraudulent. Rather, prosecutors said the scheme enabled certain merchants with problematic or unlawful business practices to obtain and maintain access to payment-processing services they otherwise would have been unable to use.
“The United States is seeking additional victims in this case,” the Justice Department said in its Aug. 21 announcement.
South Lake Tahoe connection
Eide’s connection to South Lake Tahoe is significant for El Dorado County readers because federal prosecutors identify him as formerly residing in the city on the California side of the Lake Tahoe Basin.
The federal case itself, however, is being handled in Sacramento by the U.S. Attorney’s Office for the Eastern District of California and is not a prosecution brought by El Dorado County authorities.
The investigation was conducted by the United States Postal Inspection Service. Assistant U.S. Attorneys Veronica M.A. Alegría and Ethan L. Carroll, along with Justice Department Trial Attorney Daniel Zytnick of the White Collar & Corporate Enforcement Section, are prosecuting the case.
There is no indication in the federal announcement that South Lake Tahoe or El Dorado County residents specifically made up the victims. The government is instead seeking additional victims nationwide who may have been charged by companies identified as part of the CB Surety scheme.
Federal officials seek potential victims
The Justice Department has published a list of companies allegedly connected to the scheme and is asking potential victims to come forward.
People who believe they were charged by one of those companies and either did not authorize the charge or did not receive the goods or services they paid for can submit documentation to federal investigators. The government says claimants should provide bank or credit-card statements showing the charges and identify which transactions were authorized and which were unauthorized.
Federal case information and victim assistance resources
Sentencing remains ahead
Eide has pleaded guilty, but he has not yet been sentenced.
Chief District Judge Troy L. Nunley is scheduled to hold a status conference regarding sentencing at 9:30 a.m. Nov. 12, 2026, at the Robert T. Matsui U.S. Courthouse in Sacramento.
The bank fraud conspiracy charge carries a maximum statutory penalty of 30 years in federal prison and a $1 million fine. The Justice Department cautioned that the maximum does not represent the sentence Eide will necessarily receive. His actual sentence will be determined by the court after consideration of applicable statutory factors and the Federal Sentencing Guidelines.
For residents of South Lake Tahoe and throughout El Dorado County, the case is a reminder that a local connection can emerge in investigations involving financial activity conducted far beyond the county’s borders. In this case, federal prosecutors say the alleged scheme operated across payment networks and businesses while using fabricated corporate identities to conceal the merchants behind the transactions.
The federal investigation remains active as prosecutors seek to identify additional people who may have suffered losses.







