This precisely what IBill did.
Spent the money, got a new building etc. Their business model is based on spending settlement funds otherwise belonging to their webmasters upon receipt, instead of keeping them as trust funds, while relying on future settlements to pay past debts.
First Data did not freeze all their accounts. They merely withheld 1 week worth of transaction when they found out the way IBill was operating.
If Ibill had been operating properly, all funds would be in trust accounts and they would only operate with their 15% or so fee. The payout problem would therefore only involve one week of credit card transactions, and not 2 weeks, 2 weeks of checks, two weeks of web 900 and one month of reserve.
An assessment was issued on the subject by Grant Hutchison of Militis Intelligence Corp, (
[email protected]). You can ask him for a copy.