Payza Founder Firoz Patel Receives Additional Prison Sentence for Obstruction

Additional Prison Sentence for Firoz Patel

Firoz Patel, the founder of the now-defunct Canadian cryptocurrency payments app Payza, has been sentenced to an additional 41 months in prison by a federal court in Washington, D.C. This sentence stems from his efforts to obstruct an official proceeding, adding to his prior convictions for money laundering and operating an unlicensed money-transmitting business.

Background of the Case

Patel initially pleaded guilty in 2020 to charges related to operating an unlicensed money-transmitting business and engaging in money laundering activities through Payza. The platform was found to facilitate illegal cryptocurrency transactions, aiding money launderers and fraudulent schemes. As part of his original sentence, Patel was ordered to forfeit 450 Bitcoin, valued at over $43.5 million.

Attempts to Conceal Assets

Despite court orders, Patel attempted to hide and launder the forfeited Bitcoin. He tried transferring the funds to Binance and later to Blockchain.com under his father's name. Both attempts were unsuccessful as the exchanges flagged and froze the assets. Patel further complicated his situation by instructing an associate to provide false identification to regain access to the frozen funds.

Escalation of Deceptive Tactics

While serving his initial three-year prison sentence, Patel became aware of the ongoing investigation into his hidden Bitcoin. In an effort to evade further legal consequences, he orchestrated a scheme to impersonate a lawyer, aiming to mislead prosecutors and avoid accountability upon his release.

Final Outcome

Patel's deceptive tactics were ultimately uncovered, leading to additional charges and an extended prison sentence. Judge Dabney Friedrich ordered Patel to forfeit over $24 million in addition to the 450 Bitcoin currently held by Blockchain.com. He will also serve a three-year term of supervised release following his incarceration.

This case highlights the severe legal consequences of attempting to obstruct justice and evade financial regulations in the cryptocurrency space.