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.