Indo-Canadian charged with laundering $24 million in Bitcoin

Former operator of Payza.com allegedly laundered 450 Bitcoin while waiting to report to prison in another case

A Washington DC court has ordered the detention of Indo-Canadian entrepreneur Firoz Patel following indictment on charges of laundering 450 Bitcoin (BTC), valued at about $24 million at the time of the transaction in 2021.

US District Court Judge Dabney L. Friedrich, of the US District Court for the District of Columbia, ordered Wednesday that Patel,48, be detained pending trial, according to a Justice Department release.

Read: Indian American brothers agree to settle crypto insider trading charges (May 31, 2023)

The two-count indictment, unsealed on May 17, 2023, charges Patel with money laundering and engaging in monetary transactions in property derived from specified unlawful activity.

Previously, Patel, his brother, Ferhan, and their company, MH Pillars, Inc., d/b/a Payza, were prosecuted in the US District Court for the District of Columbia for operating an Internet-based unlicensed money service business that processed more than $250 million in transactions.

Through Payza.com, the defendants ran a money transmitting business that operated without the necessary state licenses and knowingly transmitted funds that were derived from illegal activity.

The brothers each pled guilty to conspiracy to commit crimes against the United States by operating an unlicensed money transmitting business and by laundering monetary instruments.

Read: Indian American pleads guilty in first-ever crypto insider trading case (September 14, 2022)

As part of his plea agreement, Firoz Patel was required to disclose all known assets to the US government.

On Nov 10, 2020, Patel was sentenced to 36 months in prison and was given a reporting date. He laundered $24 million in Bitcoin from the Payza Conspiracy while waiting to report to prison in 2021.

The court also entered a forfeiture judgment for “any property, real or personal, involved in” the offense to which Firoz Patel had pled guilty.

According to court documents, between his sentencing and reporting dates, Patel transferred 450 BTC, traceable to Payza.com, to an account at a virtual currency exchange in the United Kingdom.

Read: US court detains Indo-Canadian over charges of Bitcoin laundering worth over USD 24 million (June 1, 2023)

The 450 Bitcoin would have been subject to forfeiture in Patel’s previous criminal case. The virtual currency exchange account was opened using the name and date of birth of Patel’s father, but with an email address and phone number controlled by Firoz Patel.

When the virtual currency exchange requested additional information about the account and the large deposit, it received a response in the name of an employee of a company in India affiliated with Payza. The account containing the 450 Bitcoin was ultimately frozen.