Payza and OboPay under criminal investigation
This is going a while back, but last we checked in the Department of Homeland Security had seized Payza funds deposited with Ultralight FS (dba Obopay Inc).
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.
How much money was seized was never disclosed, ditto any information about a resolution or outcome.
Now, almost two years later, some light is shed on the matter.
This new information details a criminal investigation and comes by way of a Victim Witness Assistance update, spotted by Patrick Pretty earlier today.
The United States has opened a criminal investigation involving Obopay and Payza, a Ponzi-forum darling.
Details of the probe are unclear. But the office of U.S. Attorney Channing D. Phillips of the District of Columbia confirms on its website that the U.S. Department of Homeland Security through Homeland Security Investigations (HSI) is involved in the investigation. So is the Washington, D.C. Financial Crimes Task Force.
That’s pretty much all we know at this stage, with the DOJ Victim Witness Assistance update advising
as part of that investigation, the United States Attorney’s Office for the District of Columbia has requested a United States District Judge to pause currnet (sic) civil litigation relating to Payza and Obopay.
The Judge has paused the litigation until January 22, 2016.
That civil regulatory litigation had been filed against Payza and Obopay was news to me.
A search on Pacer revealed only one civil lawsuit in which Payza are named defendants (MH Pillar), and it’s not a US regulatory filing. Thus the current status of civil litigation against Payza and Obopay are unknown.
What we do know though is the DOJ’s criminal investigation into Payza is likely to be concluded by January 2016, and I suspect criminal litigation against Payza and its management will follow.
With Payza knee-deep in MLM underbelly fraud, among other things, we’re probably going to see similar filings as per regulatory litigation against Liberty Reserve.
I suspect the DOJ’s seizure of funds back in 2013 was the beginning of criminal proceedings against Payza, likely obtained via a sealed injunction.
With Payza’s funds in the US seized, the investigation continued and will lead to a court filing.
The extent to which Payza’s global operations will be affected remains to be seen. But if it’s anything like the coordinated effort to bring Liberty Reserve down, then Payza as a payment processor will likely cease to exist.
That would leave Solid Trust Pay at the forefront of processors still willing to openly service the MLM underbelly. But for how long?
Liberty Reserve was shut down in 2013 and Payza’s funds frozen shortly thereafter.
As pervasive as they are in fraud circles, it’s probably naive to think Solid Trust Pay isn’t being investigated already…
As per the DOJ Victim Witness Assistance update,
shortly after (January 2016), additional information will be made available on this website about the status of this investigation.
Update 22nd March 2018 – On March 8th Payza co-founders Firoz and Ferhan Patel were indicted as part of a $250 million dollar money laundering case against them.