Dept. of Homeland Security seizes US Payza funds
Reports from Payza clients began to filter in yesterday about the payment processor having problems in some US states. In an announcement sent out to clients in the affected states, Payza advised
Regarding your funds
The funds you currently have in your account are secure and safeguarded under, and according to, the regulatory guidelines of your state.
We are unable to complete any requests to withdraw or transfer these funds at this time, as they are currently being withheld by Ultralight Financial Services, formerly known as Obopay Inc., a licensed U.S. money transmitter of which Payza was an agent.
In order to provide payment services to our U.S. clients in your state, Payza entered into an agreement with Obopay Inc., a long standing and highly reputable money transmitter.
However, following a change in management and in name, Obopay Inc., now known as Ultralight FS, is currently refusing to process any customer transaction requests from the Payza platform, and refusing to release your money to you.
We have tried repeatedly, and to no avail, to resolve this problem by contacting their management, their legal team and your state regulator.
We are pursuing legal action against Obopay Inc., Ultralight FS, their officers and the CEO of both entities, Carol Realini. This legal process, however, is lengthy and will take some time to resolve.
Your state regulator has told us they will not intervene unless they hear from you, the owner of your funds. Our only recourse is to ask you to demand action from both Ultralight FS,formerly known as Obopay Inc., and your state regulator.
Please use this message to send to your state regulatory:
Dear [State Regulator],
Payza has let me know that Ultralight FS, formerly known as Obopay Inc., is refusing to make my money available through my bank account or my Payza account.
I am writing to ask you to take immediate action to solve this problem.
[firstname] [last name]
We want to stress that your current funds are entirely secure and safeguarded by the Issuing Agency of your state. With your help we are confident this problem can be resolved quickly.
Please contact your state regulator to request that they intervene to allow us to transfer your funds to your bank account immediately.
I held off reporting on this initially as the problem appeared to be, at least according to Payza, between themselves and Ultralight FS (Obopay Inc.). Pending further information about Payza’s claimed legal action, or an announcement from Ultralight FS, there wasn’t much else to go on.
Today Ultralight FS have put up an announcement on their website, informing “MH Pillars dba Payza customers” that
The US Department of Homeland Security has seized all MH Pillars dba Payza money on deposit with UltraLight FS. Additional information will be published as we receive it.
It was initially reported by Payza customers that funds were inaccessible in 29 US states, however the above announcement now suggests this is a nation-wide seizure by US authorities.
Payza is a widely used payment processor in MLM circles, typically being associated with the underbelly of the industry.
The company has ‘offices in London, New York City, Montreal, Mumbai, Dhaka, Moscow, and Stockholm‘.
MH Pillars Ltd, a UK-based advanced payments consultancy, acquired the strategic assets of AlertPay (Alert Services Inc., CANADA) and launched the Payza.com platform in May 2012.
In July 2012, the company announced that Alastair Graham would become the new Chief Executive Officer for Payza, a new position for the company. (Wikipedia)
Alistair Graham resigned as Payza CEO just a week ago on November 21st… coincidence?
At the time of publication there is no information regarding the Department of Homeland Security’s seizure of Payza funds on the company’s website. There is also no information available on the DHS website (including their Facebook and Twitter pages).
On their website, DHS advise
The Department of Homeland Security has a vital mission: to secure the nation from the many threats we face.
This requires the dedication of more than 240,000 employees in jobs that range from aviation and border security to emergency response, from cybersecurity analyst to chemical facility inspector.
Our duties are wide-ranging, but our goal is clear – keeping America safe.
How Payza posed a threat to the US is yet to be revealed and, due to the Thanksgiving holiday occurring in the US, it’s unclear whether any further official information will come to light before next Monday. I’ll keep an eye out though and update if I hear anything.
Are we looking at another pending Liberty Reserve money laundering shutdown or is the Payza fund seizure something else?
On the MLM side of things, I’m yet to hear of any causalities. Stay tuned…
Update 28th November 2013 – As of 13 hours ago, Payza were still informing clients via Twitter that Ultralight FS were to blame:
Whether Payza are/were aware of the DHS seizure is currently unknown.
Update 29th November 2013 – Payza have posted an official update on their blog, referring to the seizure as a problem with “various State Regulators”.
As you may be aware, Payza members in certain U.S. states have had access to the funds in their Payza accounts restricted. We are working to resolve this issue.
Please note that this issue only directly affects a small percentage of our global member base. We are working with these members and the various State Regulators to provide them with a means to receive their funds.
Members in the affected states: There is further account-specific information available to you when you log into your Payza account, which you still have full access to, as well as contact information for your State Regulator.
We apologize for this inconvenience.
No mention of the Department of Homeland Security or seizure of funds is mentioned.
I know I bag on T Le Mont, but if this is so… he is up the creek without a paddle. He has said in the past PayPal™ has basically froze his account. He would use Payza all the time for everything, guess it just not his year. Oh the irony!
Well now, what comes around goes around. Payza AKA (Alert Pay) has turned a blind eye when it comes to Ponzis using them to sucker people into their HYIP Scams and programs. Its about time!!
STP will be next as they were also involved in numerous scam programs. They can’t play dumb.
yep. Next year aint gonna be good. Something has to happen with “other” payment processors who were incahoots with ponzi like programs. Aiding and Abetting perhaps ?
The ONLY thing this can be is money laundering.
US apparently is really waking up to the threat of “dark market” and “dark economy”. Liberty Reserve, Silk Road, and now this. Interesting indeed.
You may find this document, allegedly from the DHS, to be of some interest:
Is this “industry” anything but underbelly?
One thing I would not hesitate to place a bet on: that the “Regarding your funds” letter was not written by a lawyer and was not written by anyone who had been advised by a lawyer.
UK payza users have suffered for over a year after being blocked here with no access to any funds which is theft, but still they ignore all emails to them and cannot give an honest answer as to why they cannot release our funds
…and realistically what effect can be expected from contacting a State Representative if Dept of Homeland Security is responsible for freezing the accounts. I suggest they reach out to their Brother Elks instead.
Article updated with latest Payza blog. Nothing further from DHS or Ultralight FS.
All this speculation over a bunch of words written by Obopay/Ultralight is meaningless. The truth is somewhere in between.
I think if we look a little deeper, if Obopay was the licensed company holding all the members’ money, then Homeland could not have ask for a freeze on that since it does not belong to Payza. Since this only affects 29 or so states, then naturally Payza is still valid in all the other states.
But after logging into my account, I can still do payments and receive payments. Sure I am out $900 bucks, but it does not look like Payza is in any trouble. It seems that a certain balance is being held illegally by Obopay and we, the members, are the victims along with Payza.
This is all because of the stupid state regulatory requirement which makes it virtually impossible for any payment service in doing business in the USA.
Uh, what kind of logic is that?
Well yeah, if you totally discount Ultralight FS’s “homeland security has seized the Payza money” announcement. Time to stop making stuff up based on faulty logic methinks.
Here’s the latest from Payza (Twitter):
Interesting unconfirmed reply from Ultralight FS that throws the blame back onto Payza:
I don’t think we’re going to be able to get to the bottom of this till early next week.
Did Paypal go out of business?
This just breaks my heart.
There are plenty of them. it’s called a BANK. (or credit union)
Paypal is licensed in like 30 out of 50 states as a bank, and is registered in the rest as out of state bank. It also holds banking license in the EU.
Maybe Paypal is Official US Govt Money Laundering Company ? and ofc Paypal is known for eating people’s money :3
Very interesting indeed. I think that Ultralight FS which used to be Obopay, are lying to save their own asses. Obviously this cant be true since the terms and conditions on the Payza site quoted that they were an authorized agent of Obopay where they were licensed.
With that understanding, what money would be held by Obopay except for the money that belongs to clients. Why would Payza have their personal money with them and not the client monies? Makes no sense. Obopay is not a bank.
Obopay is a licensed money transmitter, which is one of the functions of a bank: move money.
To do that, they hold reserves with their exchange partners, such as Payza. It’s a lot like a secured “credit” card. The partner can use up to that much… no more until they replenish the reserves.
It’s this reserve that was frozen by DHS.
Payza says obopay changed to UltraLight FS .. but their website doesn’t have that in their news:
Going to http://ultralightfs.com/home.html says Payza funds are held by the US Department of Homeland Security
I called the US Dept of Homeland Security @ (202) 282-8000 <== Anyone else get a different answer?
They said they are NOT seizing any funds.
UltraLight FS website being given is a website made with a godaddy template, registered just a couple months ago.
If this company is working with a lot of other companies, they sure don't have any other info on their website about anything else.
Looks like Payza has scammed people out of a lot of money.
Searching history of Obopay is puzzling and interesting.
Obopayusa now says it’s changing its name to ultralightfs and repeats the warning on Ultralightfs.
Checking the Obopayusa website shows tons of unlinked pages, but the About-us page seems to match the public info listed at public databases like CrunchBase and BusinesWeek.
It is a public company, with documents on EDGAR. On the other hand, I am NOT able to find ANY records on EITHER Obopay or Ultralight in California Department of Business Oversight (DBO), Division of Financial institutions (DFI), despite both having a California address… Weird…
What’s even more interesting, NEITHER appears as a regular corporation or LLC in California SecState “Kepler” database. So where are they registered?
I can find NO reference to Ultralight ANYWHERE. If Obopay is indeed changing, I can’t find any paperwork for it.
UltralightFS domain is registered by “Accelerated Commerce”, which goes to two of the officers at Obopay, a Rodney Robinson and a Marvin Mah.
Checking for Rodney Robinson on LinkedIn shows that he also works at MasterCard NetSend, a “white-label” solution for money transmissions. He’s also apparently a Youth Soccer fan. On the other hand, it seems he also used his mother-in-law’s address for a few of his businesses (the one in Los Altos). No one knows where it’s REALLY ran out of…
Nobody said any funds are seized. It’s FROZEN / held.
Oops, correction. Rodney Robinson listed his project as “MasterCard MoneySend”, which was a product MasterCard launched with Obopay back in 2008.
Chances of Obopay changing name just to stiff Payza is negligible. My “bet” is still on money laundering and anti-dark economy investigation.
Obopay appears to be a foreign corporation conducting business in California. It does not need to incorporate in California. A business license is sufficient.
EDGAR indicates its a Delaware Corp/
Obopay, Inc. (Filer) CIK: 0001350775 (see all company filings)
IRS No.: 731732408 | State of Incorp.: DE | Fiscal Year End: 1231
Ultralight is also a Delaware Corp. (apparently conducting business in California…. and very likely in numerous other States as well.)
Ultralight FS Inc (Filer) CIK: 0001337278 (see all company filings)
IRS No.: 000000000 | State of Incorp.: DE Type: REGDEX | Act: 34 | File No.: 021-80637 | Film No.: 05061654
I suspect that Payza was attempting to route funds through Ultralight to sunny places.
I thought you need to be “domiciled” in California even if you’re an “out-of-state” corp? I may be mistaken. 🙂 Both appear to “physically reside” in California.
Does Delaware have the equivalent of California’s DBO/DFI?
Domeciled generally refers to the place where a company’s headquarters is located.
Under California law a corporation formed in California is considered a domestic corporation. A corporation formed in any other State (such as Delaware) is considered by California to be a foreign corporation.
Foreign corporations do business in CA all the time and need no headquarters or even offices in the state since they conduct business through agents.
Also consider an online bank incorporated in Delaware. It may or may not have a physical presence in CA and yet because it is conducting business with CA citizens its subject to California law. Note however, that its headquarters could be anywhere.
DBO appears to be a revamped and expanded agency in CA and its scope far exceeds what I think is available in Delaware. However the Sec of State of Delaware has a name search function.
According to OboPay, it has the required licenses listed on it’s website here: http://www.obopay.com/corporate/en_US/stateLicenses.shtml
By the looks of it Obopay is a Delaware Corp., headquartered in Redwood City and licensed to transmit money from the listed States and DC.
Just a guess but they appear to be totally legit.
UltralightFS appears to carry licenses as well. Many are the same exact license numbers as Obopay but then some are not and the State’s covered are slightly different.
I know they are totally legit. I doubt those guys are dummies. On the other hand, it’s nice to be confirmed and all that. 🙂
Though Hoss, you *where* saying that TYPICALLY the HQ state needs to be domiciled, right? 🙂
A company usually chooses its headquarters or prinicipal place of business (its domecile) on the basis of tax considerations, incentives, logistics, raw materials, land, labor pool and energy availablility.
The State of incorporation is independent of that.
Where to incorporate is much more about protective statutes, governing law and established practices. Delaware, in the days of Rockefeller, Ford, Edison and Getty instituted laws that were favorable to corporations.
Being near New York and the financial center of the US, Delaware was the choice of corporations wishing for such legal protection, thus Delaware has a long established and PREDICTABLE body of law. Very important for large corporations and for their directors.
I do not think it would be far wrong to estimate that 95% of the Fortune 500 companies are Delaware corporations even though their headquarters (domeciles) are located in places like Atlanta, New York, Dallas, Houston, Minneapolis, Cupertino and Detroit.
Where a company conducts business need have nothing to do with where it incorporates.
Seems that you may have an inside scoop on the inner workings of Obopay. Are you by chance one of the principals trying to stir up trouble here by providing false info?
It seems that this ‘reserve’ situation is BS since no one else ever has done this. After speaking to Payza, their stance on the funds that are being held by Obopay is legitimate.
Reserves! What rubbish!
The plot thickens with Ultralight FS’ latest update:
Does this mean DHS doesn’t have pplz’s cheezeburgers? What’s going on???
First Ultralight FS claimed Payza funds had been seized, now they’re saying they don’t have any (which would be technically true if DHS seized and transferred the funds elsewhere)… Payza meanwhile seem to have no clue what’s going on, maybe DHS isn’t talking to them yet.
Maybe Payza is contending that Ultralight should not have surrendered/transferred certain funds to DHS. If so, it does not seem like an argument they are likely win.
Although there are many holes coming from both sides, I want to point out one thing that nobody has touched on yet…
DHS does not take half measures. They are an all or nothing organisation. I have never heard of any case where DHS seized partial assets and continued to let the business run as usual. Such half measures would allow that business to essentially “destroy all the evidence” and move other assets to safe havens.
When DHS gets involved it is always a full on raid in multiple locations where everything is seized and business operations are put in immediate lock down.
As such, I am lead to believe that the DHS seizure is completely diversionary and absolutely false, smoke and mirrors, which I also assume the messages at Ultralight FS and ObopayUSA have changed their messages.
At the same time, I have a hard time believing that either of those sites are even legit. 7 to 8 figure corporations do not use a simple Godaddy plug and play html template to represent themselves, nor do they play public slander/libel games.
There is far more going on here than meets the eye and I personally feel Payza is where the finger should be pointed and countless US account holders are victims at the hands of Payza. But, more will be revealed.
Something else I found today in regards to Ultralight being stated as “formerly Obopay” is information allegedly found in Florida records.
If this info is correct, the corporation was Omney Inc for only 14 days before changing it back to what it once was before 2005, Ultralight FS Inc. That alone is appears to be very odd to me.
One might speculate that Obopay spun off part of the business to Omney who in turn resurrected the original UltraLightFS name. Obopay uses both a Redwood City address and one in Mountain View (just a few miles apart. Maybe the co-founder(s) got divorced.
I dont think Payza is to blame. Their story and explanation makes sense and has remained the same from the beginning of this situation. The only party that has changed their stance is Obopay/Ultralight FS.
After looking into Obopay, for years they squandered investor monies and built a useless company that did not seem at all successful. Their principals and employees cannot run a successful business if their lives depended on it. Thus I think that they are now resorting to stealing new money and blaming Payza for it.
I agree that DHS or any government authority does not take have measures. I think it is all or nothing approaches. This is probably why Obopay/Ultralight changed their messages.
This freezing of our funds is a SCAM. This is the copy of the email I received from them
Homeland security has not seized their funds since Homeland Security would not do that….Only Department of Justice would seize their funds.
This is a scam by Payza. Report them to the authorities.
But it was Ultralight FS who mentioned Homeland Security had seized funds, not Payza?
Just reread things again:
So it means that Obopay has always held the money and now they are trying to steal the money but blame it on Payza.
David, just because they wrote that in an email, does not make it true.
Latest update from Payza, apparently they’re now “fixing it”:
How Payza are “fixing it” is unclear.
Why does Payza ask the affected members to do that?
Normally it should contact the correct authorities itself, if the situation will require actions like that. Payza have identified it to be a dispute between itself (the agent) and Obopay / ULFS (the service provider). It should normally handle that dispute itself without involving the members.
There’s minimum 2 different versions of the story:
1. Ultralight FS claimed the funds were frozen by DHS.
2. Ultralight FS claim they don’t hold any Payza funds.
3. Payza claim it’s a dispute between Payza and Ultralight FS
If DHS or any other authority have been involved in the situation, then Payza have published misleading information. Payza’s Twitter support has referred to it as a dispute between the agent (Payza) and the service provider (ULFS), dating back to June 2013.
Funds held in e-Wallet accounts are typically held in ONE big “holdings account”, with all the funds mixed together as a “pool of money”. If the account is frozen, ALL clients will be affected.
In this case, only clients in 30 or 35 states in the U.S. have been affected, 5 months after Payza changed to a new service provider. That doesn’t make much sense?
Transactions between June and November should normally have been deposited in the NEW account rather than in the old Ultralight FS account. Why on Earth did Payza transfer funds to and from that old account for nearly 5 months, for clients in 30 or 35 states?
Actually since it is our money, we have to do it ourselves, the same as if the company goes bankrupt. Besides, Payza already tried to do this by contacting (or so they say) and their response from the state licensing offices is that since there are no complaints from the clients, then they have no reason to get involved.
One possible scenario: those 35 state’s AG, along with SEC and other members of FinCEN (that shut down Liberty Reserve earlier this year) are going after Payza.
Another possibility is there’s another Ponzi that’s been identified by FinCEN to be operating in those 35 states and it’s using Payza.
My money’s on the first theory.
No, this is what I learned from tuning in to the Zeek Rewards mess. the eWallet providers held a ton of Zeek money as deposit. What it really is… hostage money in case Zeek runs away.
Same thing here. Money transmitters *are* eWallet providers.
FYI, Zeek had about 20 million held by Payza when it was closed by SEC.
OTOH, I’d like to point out that Payza is NOT a US company. Payza, and its parent MH Pillar is a UK company, and its predecessor, AlertPay, was a Canadian company. So the maximum DHS can do is go after the US assets, unless they involve some Interpol level of cooperation.
If you lent A $10, and you want it back, would you accept A’s excuse “I left it with B and B won’t give it back so I can’t pay you”? A’s the one that owe you $10, not B.
If Payza has a problem with Obo/Ultralight that’s their problem. Your money is with Payza, not Obo/Ultralight, or DHS.
I understand your point, but you are not comparing things equally. It just looks like gave the money to A, but B is the one that held it in trust as per the licensing arrangement. So obviously we will cry foul towards A, but in fact since all the handling was done by B, then they are to blame.
If the funds are held and continue to be held by Obo/Ultra, then that is the party at fault. All Payza can do is point the finger towards the provider that is trying to cheat their way out of this whole.
Actually if you read the public statements clearly, as I just did, it said initially that Payza was in control of $20m of Zeek money, but that is the interpretation of the receiver based on the limited information they had.
Further on with newer filings, you will find that they have identified around $10m that is being held in foreign accounts, of which some of these monies have Payza mentionned in it. I dont know fully what that means, but what I do know is that the payment space is very complicated and nothing is as simple as it is claimed.
With all the regulations and laws which keep tightening every few months, no wonder that Payza had to partner with Obopay/Ultralight to handle all the US based transactions.
Just found this…
So it looks like the regulators are keenly looking into Obopay/Ultralight activities. This is directly from the Florida office of Financial Regulation.
Like I said, DHS does not do half measures. Look at FullTiltPoker, and LibertyReserve.
That could explain some things, but, Obo did indeed very recently become Ultralight FS (again) which would mean there ‘should’ be a new license under the new, but old, name of Ultralight FS.
Unless of course changing the name of the corporation would have no bearing on a license held in the previous name.
So the question is, is the license transferable? What if it was more than just a name change like a change of ownership? In the case of name and ownership change, is that license still transferable?
If, in either case, the license is not transferable, then there should be a new license created under the name of Ultralight FS.
If the license *is* transferable in either case, then where does the money go now that the license is ‘Terminated’? Do the holdings get put into some kind of government regulated escrow?
Full Tilt is a US company, Liberty Reserve is a Costa Rican company with headquarters in the US and Costa Rica.
Are you sure? If B cannot pay back A, B owes A money, but B does not owe YOU money.
It would say that if they are indeed changing name to Ultralight, would it not?
There are more innocent explanations other than “Ultralight cheated Payza”.
Perhaps you need to read the latest report, Q3 2013 section II A 2 c:
The point is the money transmitters are holding each other’s money as deposit/reserve for chargebacks, just as they hold customer balances. It’s not “rubbish”, which I believe was the term you used.
Correction, Full Tilt was inc’ed in the Channel Islands (off UK), but its operators were all Americans, and more than half of the players with balance are Americans.
Wasn’t that what I said before you accused me of being an “insider”?
E-Wallets don’t contain any money, they’re not bank accounts.
E-Wallets are typically a software solution designed to keep records of virtual funds (“unfulfilled transactions”), or potentially “claims”.
E-Wallets should typically be connected to one single bank account owned by the merchant (MLM company) or the agent. External transactions will go to and from that account, while internal transactions will be non monetary transactions.
THE STORY SO FAR
Payza informed clients about frozen e-Wallet accounts on November 27/28. It identified the cause to be about an unresolved dispute between itself and Obopay, and advised clients to contact their local state regulators. Payza’s intention with that was to put pressure on Obopay.
Obopay then put up an initial message on its websites, informing Payza’s clients that funds had been seized by DHS. It later changed that message to “We hold no funds for Payza clients, our relationship was terminated in June 2013”. That may be correct?
That’s two conflicting versions of the same story. You shouldn’t make decisions or act on information like that.
2 DIFFERENT VERSIONS
Payza’s version is telling you that it doesn’t have liquid cash to support payouts to existing balances. It has freezed the existing balances for a huge number of clients. It does however have a claim against its former service provider Obopay Inc., an unresolved legal claim.
Obopay’s versions told about an initial problem in June 2013, about funds being seized by DHS. That may be true, i.e. Liberty Reserve was shut down in late May 2013, and it may have led to seizure of funds from other payment processors.
Obopay also claim that the relationship with Payza was terminated in early June 2013, and that it doesn’t hold any funds owned by Payza members. It does neither deny nor confirm any legal dispute with Payza.
If funds were seized from Payza’s accounts in May/June 2013, that problem should have been made visible for its clients already when the problem occurred, rather than 5 or 6 months later.
You can’t disguise a problem like that and pretend it doesn’t exist. You can’t assume that the problem will be resolved. That’s what Payza has been doing, “disguise the problem and assume it will be resolved”.
The correct procedure here should be to request the correct version of the story from Payza. If it doesn’t have liquid funds to support payouts to the existing balances, it can’t legally perform any other transactions either. The company clearly has a major liquidity problem, and it should most likely be put under administration by a court.
Actually if you call Payza, they are stating clearly that though the agreement ended June 2013, Obopay kept on promising a release and to complete their fiduciary duties towards the clients for all that time. 5 months later, no end in sight, led Payza to let the cat out of the bag, so to speak.
As well the funds frozen thing was brand new information that was only revealed when Payza pushed back hard onto Obopay to commit in some way. Notice how quickly that Obopay even backtracked on their nonsense of homeland security.
They should produce a CLEAR explanation on their website, with the help of a lawyer.
If Payza is unable to pay its liabilities to its clients, it should normally file for bankruptcy. It should probably have done that 5 months ago.
Liberty Reserve was shut down in May 2013, with some seizing of funds by DHS. The termination of the business relationship between Payza and Obopay followed shortly after, in early June 2013.
Payza may have been affected by the shutdown of Liberty Reserve.
I will ask again in hopes someone may know.
Since Obopay’s Money Transmitter license was Terminated, where does their holdings go? Do they get to walk away with the all the money belonging to US account holders with no accountability, or does that money go into a government controlled escrow? Where does it go?
I do not know the requirements/stipulations/regulations of a US Money Transmitter License, but I would like believe I will see my money again.
Obopay can have more than one money transmitter license in a different state. I’m sure people are scouring the Interwebs as we speak.
Sorry about that. It just seemed like it. I take that back.
This just found. New link discussing the situation with some new info posted as well:
Paypal, for example, is separately licensed in 52 states:
Similarly for Obopay:
Ultralight FS website:
Curiouser and curiouser!
It is interesting to see all of this speculation. So I’ll ad some of my own DHS/HSI can in fact seize funds. Just a simple fact.
Payza removed Obopay as their agency provider back in June. And they did not replace them meaning from the second that Payza removed Obopay and assuming they did so because Obopay could no longer provide agency to them, from that second forward Payza was operating illegally in the the many states including the District of Columbia that require a money transmitter be licensed.
That alone ladies and gentlemen is grounds for the seizure of any funds Payza has in the US. This also seems to point that it would be impossible for these funds to suddenly be “customer funds”. I just don’t buy that even thought it seems as though the companies cut ties in June that suddenly in November the funds are customer funds.
I don’t even know how that would seem logical to someone. If I am wrong I’d like to have some explain the flaw in my string of logic.
So while I am just joining in on the speculation there seems to be some pretty clear and open facts that point towards some dishonest actions.
Simply put- if you push all the rhetoric and smoke and mirrors aside, one thing is clear. Payza has been operating without a license since June. And that is a federal crime. And if you follow the logical path DHS is a federal law enforcement agency so it makes sense.
I am not sure I would buy any excuses offered by Payza.
It did probably replace Obopay in June, but now that replacement also have terminated the agreement.
Still can’t tell where the problem lies, as neither side is showing all of their cards, so to speak, and any information they release seem to be designed to deflect blame rather than provide genuine information.
Here’s speculation though: Payza *should* be able to find another money transmitter in the US to handle US withdrawals. It had not done this. This means two things… a) they are barred from doing so until their issue got resolved… or b) they have no money to give to the new partner as reserve/deposit/hedge.
I seriously doubt it’s the latter, so it’s more likely to be the former.
Which of course makes you wonder what’s that issue, and how much of Obopay/Ultralight’s statement really reflects on itself rather than Payza.
I hope it all get settled soon. Lots of people are having funds frozen prior to Christmas; which is not good.
So yesterday Ultralight FS stop accepting customers. Today Payza suspend all operations in the US.
Will the real Slim Shady please stand up…?
You folks are all looking in the wrong direction here- just do a bit of a search on the name Firoz Patel (head honcho of Alertpay/Payza).
He is wanted in the US. He owes the Canadian tax authority millions….and the list goes on and on.
Patel has been under mounting pressure of late and is no doubt behind all of this.
Charles Scoville – you should apply for a job with those fine folks, you’ll fit right in!
You are an idiot! This has nothing to do with 1 person, whether you are correct or not. This is between organizations that have some problems that are affecting us and our money.
Dont go around blaming individuals about things that are completely irrelevant. How is this person the head honcho of Payza, when Alertpay was bought out by Payza? How do you know anything about him? He is wanted in the US, really? And you know this how?
Francis you are wrong. To operate a financial services company in the US all of the employees of the company must have clean records Especially the principles of a company.
If it is true that Mr Patel has a warrant(s) out for his arrest for alleged fraud and he has substantial tax issues as stated than you can bet your bippy that would preclude them from obtaining their own licenses.
It would also mean that if he failed to disclose that to Obpay/Ultralight and they then found it out later that would in fact be grounds for them to terminate any agreement.
If Payza’s accusation is true that what Obopay had was customer funds DHS would have no reason whatsoever to seize that money, nor could they unless probable cause existed that money was from the proceeds of crime that the customers engaged in and since I am one of those customers and since I don’t engage in illicit business that simply cannot be true.
My bank sure as hell wouldn’t say Thomas- your account is several thousand dollars in the hole but since you told us that someone snuck in to your home and stole a pile of cash you had laying around- don’t worry about paying us back. Hell no they don’t care what happened to me outside of my contractual relationship with them. All they care about is I am supposed to keep my account cash positive.
One thing I think is certain, if Payza are doing anything suss in the US, then all this getting their clients to contact the authorities stuff isn’t going to help them.
Once (if they aren’t already) the regulators get involved and investigate, any dodginess on Payza’s part in the US will come out.
Ultralight FS meanwhile is effectively dead in the water. Whether they can communicate anything more than that due to an investigation I can’t say, but the situation certainly is strange.
The UltralightFS website has been updated on December 12th with the following message:
The link provided goes to the District of Columbia United States Attorney’s Office website, on which the following message is published:
The trail goes cold there. Patrick Pretty contacted the Attorney’s Office and was told “an investigation is underway”.
Payza has a different version of the story, but it’s linking to the same government website.
Obopay clearly have seemed to have had some “restrictions” on what type of informationn it can publish, the statements have generally been short and “minimalistic”. It has probably received a gag order, and now it’s directing further questions to the correct authority.
Payza on the other hand have used marketing language in its statements. Normally we don’t use that type of language if we want to inform people about a known problem. “Short and factual” is usually the best style.
Based on that logics, Obopay has probably known about the problem for some time, while Payza still is trying to figure out what the problem is about.
I concur, Payza appear to be totally in the dark on this one.
Payza had no idea what’s going on other than it can’t access its money held in the US and it had a million (?) screaming people in its face (figuratively). So it’s trying to shift the blame as much as possible as it has absolutely NO control over the situation and they’re not about to take blame for a situation it has no control over.
I was searching around when I noticed that Payza is also NOT usable in UK back in 2012 (?!) Any one had the story on that?
This was the press release from Payza at the time:
Just thought of something.
There’s an article in Lexington NC which questioned… why haven’t any criminal cases been brought against the perps of Zeek… the answer is… the charges can ONLY be filed by US Attorney’s office… and they do not comment on whether there’s a case pending or not… only that they are working closing with the SEC.
So… Has Payza paid back the 20.4 mil that they’re holding for Zeek?
Is the US attorney’s office looking for dissipating assets? Or further evidence of money laundering?
I have a Payza merchant account, but luckily there is little money in it. Sorry I can’t add much to the discussion, but there is one thing I want to mention.
In regards to an earlier message about the name changes and name change back. That sounds like they reverse merged into a publicly traded corporation, which I would guess is pink or gray sheet (penny stocks), and then changed their name back.
Many corporations incorporate in DE, but they must be registered as a foreign corporation in any other US state in which they operate. Unlike other states, one can not look up the officers or board members of a DE corporation, only the registered agent. You have to pay DE even to find out if the corporation is active and in good standing.
TX does the same thing, but very few states are like that. My corporations are in FL and everything is public record.
Good info concerning the reverse merger perspective.
In my State only a business license is required to conduct business as a foreign corp., and if the activity is solely money lending, investment, or banking not even a business license is required.
PPblog has some update related to this Payza/Obopay case, about a criminal invwstigation.
So criminal proceedings against Payza/Obopay sometime before January next year.
I imagine it’s going to be similar to the Liberty Reserve bust. Which MLM underbelly payment processor is going to be next?
I had a quick search … and some of my point here is to show that I didn’t find much information — based on the search string “payza obopay lawsuit”.
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Obopay and Payza seem to have been organized by the same owners, Firoz and Ferhan Patel — originally from India, emigrated to Montreal, Canada.
This site seems to have a lot of background information …
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The current message from DOJ is from Victim Witness Assistance, where Obopay-Payza have been grouped together as one single case.
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Obopay/ Ultralight FS settled a lawsuit by financial regulators in Kentucky in January 2014 (based on routine investigation in October 2013). Basically, it surrendered its license and agreed to never operate as a money transmitter in the state of Kentucky, but that was all (no fines, no injunction, etc.).
It was represented by a lawfirm in California. No personal defendants were mentioned. The court documents indicated a completely empty shell company (no people, no documents, no financial records, etc.)
What happened to the money in my account. Who got it and why isnt it in my payza account now.
The original post is 3 1/2 years old.
Did you try asking Payza?