WASHINGTON — The operators of online payment processor Payza.com have been indicted by a federal grand jury on money-laundering charges, as well as running an online unlicensed money service business.
The indictment, returned earlier this month and unsealed yesterday, charges Montreal brothers Firoz Patel and Ferhan Patel, as well as parent company MH Pillars Ltd., with operating a money transmitting business that operated without the necessary state licenses and knowingly transmitting funds that were derived from illegal activity.
The indictment also seeks the forfeiture of about $10 million that has already been seized and frozen. Payza.com’s flagship site and an associated site, AlertPay.com, have been seized by the Justice Department.
“The indictment alleges that the Patels, together with other co-conspirators, are responsible for transmitting over $250 million throughout the U.S. and elsewhere. The investigation is continuing,” the Justice Department said today in a release.
Payza.com’s platform offered numerous payment solutions for an array of industries, including adult entertainment.
The company also offered its Payza Card, a MasterCard-branded prepaid card that could be loaded with U.S. dollars. It was touted at the time of its launch as one of the fastest and most convenient ways to convert bitcoin and other cryptocurrencies into spendable cash.
According to the indictment, Payza’s customers included Ponzi schemes, pyramid schemes and a child porn site. The Patels allegedly opened bank accounts in the U.S. and laundered their illegal proceeds through those accounts.
The indictment alleged that the criminal activity took place from in or about March 2012 until the present.
The Patels 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.
"Under District of Columbia law, money transmission businesses must obtain a license from the Superintendent of the Office of Banking and Financial Institutions of the District of Columbia, and the failure to do so was a felony," the Justice Department said.
If convicted, each of the brothers faces a maximum sentence of more than 25 years.
Ferhan Patel was arrested on Sunday in Detroit. He remains held pending further proceedings in the District of Columbia. His brother, Firoz, remains at large.
