ICE Charges Payza and Two Canadian Citizens with Using Bitcoin for Money Laundering

This week, the U.S. Immigration and Customs Enforcement’s Homeland Security agency (ICE) revealed that it is charging two Canadian brothers and the company Payza with illegally transmitting and collecting fees for money laundering through cryptocurrency transactions.

Money transfer service providers need to register with the U.S. federal and state governments

According to a press release from ICE, two Canadian brothers and Payza are facing legal trouble for providing money services without a license and suspected money laundering. Payza is a payment processor that uses Bitcoin and other currencies for daily settlement business. Payza is suspected of participating in a Ponzi scheme and other criminal activities, earning more than $250 million. The news was revealed by U.S. Attorney Jessie K. Liu and ICE Agent Patrick J. Lechleitner. Facing charges along with Payza are two men from Quebec, Firoz Patel (43) and Ferhan Patel (37).

“This arrest and prosecution demonstrates that we will strictly enforce the law to protect American consumers,” explained U.S. Attorney Liu.

In most states and jurisdictions (including the District of Columbia), money transmitters are required to register and obtain a license from the federal government. Consumers should be wary of those who fail to comply with this law, as they may be using it to conduct other illegal activities.

Illegal currency transfers from 2012 to present

The Patel brothers face charges of conspiracy, including operating an unlicensed money transmission business and violating anti-money laundering program requirements. If convicted, the brothers face up to 25 years in prison. Payza and its parent company MH Pillars Ltd. have just been charged with illegal money transmission. The indictment alleges that the brothers and Payza have been involved in criminal activities since 2012. ICE claims that the brothers intentionally transferred funds from illegal activities through the services provided by Payza.

Even after receiving the warning letter, the two brothers continued their illegal activities

ICE also said in a news release that Firoz and Ferhan Patel continued their illegal activities despite receiving warning letters from different states and even an advisor who told them it was illegal to operate a money transmitter business without a license.

The indictment alleges that the Patel brothers, along with other co-conspirators, transferred more than $250 million across the United States and elsewhere.

ICE reported that Payza's customers were involved in multiple types of pyramid schemes, and that the Patel brothers were suspected of opening bank accounts in the United States and illegally laundering money through these accounts. Law enforcement agencies have seized property and funds related to these allegations. ICE has seized $10 million and said the investigation is ongoing. There have been other prosecutions against Americans for illegal currency transfer and money laundering before the Patel brothers case.