Payza and 2 Canadian brothers accused of operating an unlicensed money service business and money laundering
WASHINGTON – Two Canadian brothers have been indicted by a federal grand jury in the District of Columbia on charges alleging they operated an Internet-based unlicensed money service business that processed more than $250 million in transactions.
The announcement was made today by U.S. Attorney Jessie K. Liu and Patrick J. Lechleitner, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.
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 on March 18, 2018, in Detroit. He made his first appearance on March 19, 2018 in the U.S. District Court for the Eastern District of Michigan. He remains held pending further proceedings in the District of Columbia. His brother remains at large.
“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.”
The indictment alleges that the criminal activity took place from in or about March 2012 until the present. The defendants, through Payza.com, are accused of operating a money transmitting business that operated without the necessary state licenses and knowingly transmitting 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, Firoz and Ferhan Patel continued their illegal activity, the indictment alleges.
The indictment alleges that the Patels, together with other co-conspirators, are responsible for transmitting over $250 million throughout the United States and elsewhere. The investigation is continuing.
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.
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.
Further information is available to the public from the U.S. Attorney's Office, District of Columbia press release.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.
This case is being investigated by Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations, Washington Field office. It is being prosecuted and investigated by Assistant U.S. Attorney Zia Faruqui and Arvind K. Lal, Chief of the Asset Forfeiture and Money Laundering Section. Assistance has been provided by Assistant U.S. Attorneys John P. Marston and Diane Lucas; former Assistant U.S. Attorney Catherine K. Connelly; Paralegal Specialists C. Rosalind Pressley and Toni Donato; Victim/Witness Advocate Yvonne Bryant; Document Management Analyst Basizette Stribling; Legal Assistant Jessica McCormick; and Litigation Technology Specialists Ron Royal and Joshua Ellen.