Digital Payment Processor Payza Hit With Money Laundering Lawsuit

Crime, News | March 22, 2018 By:

The US Department of Justice (DoJ) has filed a lawsuit against digital payment processor Payza for allegedly operating an unlicensed money service business that processed more than $250 million in transactions.

Payza is an e-commerce business allowing payments and money transfers to be made through the Internet. It is headquartered in the UK, but primarily serves Asia, the Middle East, Europe and South America, with some of its major markets including Venezuela, Nepal, Pakistan, Brazil, Mexico and Haiti. It currently accepts four cryptocurrencies – bitcoin, ethereum, Ripple and Dash.

According to the lawsuit, Pazya and its founders – Ferhan Patel and Firoz Patel – are accused of operating a money transmitting business that operated without the necessary state licenses and knowingly transmitted funds that were derived from illegal activity. Despite receiving cease and desist letters from various states and being told by a consultant that operating a money transmission business without the necessary licenses was a crime, the founders allegedly continued their illegal activity.

The lawsuit alleges that the criminal activity took place in or about March 2012 until the present. The Patels, together with other co-conspirators, are allegedly responsible for transmitting over $250 million throughout the US and elsewhere. The founders allegedly opened bank accounts in the US and laundered their illegal proceeds through those accounts. According to the indictment, Payza’s customers included Ponzi schemes, pyramid schemes, and a child pornography site.

The founders 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.

Court documents indicate that Ferhan Patel was arrested on March 18 in Detroit and will be transported to Washington DC. His brother, Firoz, remains at large.

US Attorney Jessie K. Liu, Special Agent in Charge of US Immigration and Customs Enforcement’s Homeland Security Investigations Washington, said the arrest and indictments in this case demonstrate that they will vigorously enforce laws meant to protect the American consumer.

“Money transmitting businesses are required to be registered federally and licensed in most states and jurisdictions, including the District of Columbia,” said Liu. “Consumers should beware of those that do not follow these laws because they could be acting as a cover for other illegal activity.”