Payza co-founders indicted, facing $250 million money laundering case
For years Payza has been the defacto payment processor darling of the MLM underbelly.
Founded by brothers Firoz and Ferhan Patel, who weren’t above personally promoting their partnership with Ponzi schemes, Payza was operated out of Montreal, Canada. Both Firoz and Ferhan Patel are Canadian citizens.
Earlier this month the Patel brothers were indicted by a federal grand jury in the District of Columbia.
Ferhan Patel has since been arrested while Firoz Patel is still on the run.
In addition to eagerly assisting MLM underbelly fraudsters, Payza and the Patel brothers also serviced “child pornography rings and other criminal enterprises”.
According to the indictment, Payza’s customers included Ponzi schemes, pyramid schemes and a child pornography site.
The Patels opened bank accounts in the United States and laundered their illegal proceeds through those accounts.
BehindMLM first became aware of a federal investigation into Payza back in 2015. Details at the time were sketchy.
The indictment details the Patel brother’s criminal enterprise dating back to March, 2012.
The indictment was returned earlier this month and unsealed today in the U.S. District Court for the District of Columbia.
Firoz Patel, 43, and Ferhan Patel, 37, who live in the area of Montreal, Québec, are charged with one count of conspiracy to operate an unlicensed money transmitting business and to violate anti-money laundering program requirements, one count of a money laundering conspiracy and one count of operating an unlicensed money transmitting business in the District of Columbia.
If convicted, each of the brothers faces a maximum sentence of more than 25 years.
MH Pillars, Ltd., doing business as Payza, is charged with operating an unlicensed money transmitting business.
Ferhan Patel was arrested by authorities in Detroit on March 18th.
“The arrest and indictments in this case demonstrate that we will vigorously enforce laws meant to protect the American consumer,” said U.S. Attorney Liu.
“Money transmitting businesses are required to be registered federally and licensed in most states and jurisdictions, including the District of Columbia.
Consumers should beware of those that do not follow these laws because they could be acting as a cover for other illegal activity.”
Personally I think the $250 million figure authorities have come up with is easily lowball.
By my estimate, Payza has likely processed billions of dollars in funds over the years.
Still, it’s a start.
The indictment also seeks forfeiture of any property involved in these offenses or traceable to these offenses.
In addition, the indictment seeks the specific forfeiture of approximately $10 million that has already been seized and frozen.
The indictment and accompanying federal case was unsealed as of March 20th.
Stay tuned for updates…
Update 22nd March 2018 – As of sometime in the last 12 hours, both the Payza and AlertPay website domain have been seized by US authorities.
Update 25th July 2020 – On July 17th the Patel brothers pled guilty to money laundering.
Update 12th November 2020 – On November 10th the Patel brothers were sentenced to 4+ years in prison.
Shoutout to Patrick Pretty, who I believe was first to report on this breaking story.
that is awesome! payza will get the boot from canadian government after this news.
just missing SolidTrustPay payment processor next and others
So is this the start of Payza ending?
I suspect so. Once they nab Firoz it’ll be over.
Dude has some balls though, he’s still active on Twitter pretending nothing has happened.
I don’t think most of Payza’s clients are aware of the situation. I only came across some Clixsense affiliates complaining of Payza non-payment. Nothing major yet.
That is why I was asking, because there are many members with balance on Payza that didn’t realised how serious this is!
Searched on Google and can’t find related articles about this.
ferhan patel was headed to silicon valley from march 19th onwards, looking forward to ‘taking a break from the snowy Montreal weather’
poor bloke didn’t make it to silicon valley after all.
his last tweet is dated march 18th, i can sort of imagine him standing around detroit airport tweeting away when somebody tapped him gently on his shoulder uh, couldya stop tweeting? we have to arrest you?
ferhan patel was in the process of setting up a new payment processor called ‘payment rails’ and it seems he had managed to get the former president of paypal, scott thompson, onboard as an investor and board advisor.
i suspect firoz patel was not involved in this project and that ferhan patel was probably trying to go legit.
but i guess the past will catch up with you even if you wear a suit and tie and strut around silicon valley.
So another pair of Krassensteins?
Additional information from ICE:
Firoz Patel is too busy pitching Payza’s foray into running a cryptocurrency exchange to worry about his brother being nabbed. Probably hasn’t even noticed.
Hi, Few hours before the closure of payza I send proceeds of $1600 from website marketplace to my Payza Bitcoin Wallet.
I checked the transaction on blockchain and its already completed. Anyway to recover it?
Not if it was seized or Payza won’t return it to you. I’m guessing you tried to transfer it back and it didn’t work?
My payza account is still working.
How are you accessing it?
edit: “payza.eu” is still working so I suppose there’s still that. Guess if they’re going to seize that too it might take a few extra days.
and Pat Berry is the BIG guy behind, goooood friend of Patel brothers who recomend thousends of customers on 5 continents this perfect solution!!!
he is although one of the heads of the Coinspace multi million $ SCAM !!
No. I don’t know how to do it. Can you please explain
I don’t have a Payza account but I’d assume there’s a way to “withdraw” funds to a local bank account?
Payza website is already not working. What about the funds people are carrying?
Seized by the US govt. Not sure what happens to the seized funds but it’s tied one way or another to the outcome of the money laundering case.