I used to just report the merchants to their banking institution's fraud dept. Although, it proved fruitless most if not all of the time.

I also used to confront merchants directly, which they would of course deny and blame brokers and whoever touched their file.

To prosecute something like this would take a lot of time, money and energy in resources that would potentially just be a waste.

As someone stated, it begins with a criminal complaint, then a lawyer to follow up and handle the case.

You'll never stop it as a whole. You can cut off the head of a few, then more sprout exponentially.

It is the nature of the beast, just be good enough to catch them and don't waste too much time with them.