A 48-year-old Indo-Canadian entrepreneur has been detained by a district court in the US following his indictment on charges of laundering Bitcoin valued over $24 million at the time of the transaction, the Department of Justice said.
The two-count indictment, unsealed on May 17 charged Firoz Patel, the former operator of Payza.com, with money laundering and engaging in monetary transactions in property derived from specified unlawful activity, it said in a press release on Wednesday.
US District Court Judge Dabney L. Friedrich, of the U.S. District Court for the District of Columbia, ordered Patel be detained pending trial, the Department of Justice said in a press release.
Previously, Firoz, his brother, Ferhan, 42, and their company, MH Pillars, doing business as Payza, were prosecuted in the US District Court of Columbia for operating an Internet-based unlicensed money service business that processed more than $250 million in transactions, it said.
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 who founded and operated Payza.com, AlertPay.com and Egopay.com, each pled guilty to conspiracy to commit crimes against the US by operating an unlicensed money-transmitting business and by laundering monetary instruments.
As part of his plea agreement, Firoz Patel was required to disclose all known assets to the US government.
The court had also entered a forfeiture judgment for any property, real or personal, involved in the offence to which Firoz had pled guilty. On November 10, 2020, Firoz was sentenced to 36 months in prison and was given a reporting date.
According to the court documents, between his sentencing and reporting dates, Patel transferred 450 BTC valued at $24,020,699.83, traceable to Payza.com, to an account at a virtual currency exchange in the UK.
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.
The investigation revealed that the additional information required by the virtual currency exchange about the account and the large deposit received a response in the name of an employee of a company in India affiliated with Payza.
After which, the account containing the 450 Bitcoin was frozen.
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