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A Canadian businessman is facing another three and a half years in a US federal prison after being sentenced for laundering $43 million in Bitcoin. This comes after a previous conviction for running an unlicensed money-transmitting business.
Firoz Patel, 50, of Montreal, was sentenced to 41 months in prison on Thursday (Feb. 6), in connection to attempting to conceal and launder 450 Bitcoin, the US Department of Justice announced.
He pleaded guilty on September 17 last year to obstructing an official proceeding. Along with his prison sentence, US District Court Judge Dabney L. Friedrich ordered him to serve three years of supervised release. He’s also on the hook for a massive forfeiture, including a money judgment of over $24 million and 450 Bitcoin plus interest currently held at a virtual currency exchange in the United Kingdom.
Canadian Businessman Sentenced for Obstruction of Justice for Hiding and Laundering Millions After His 2020 Money Laundering Conviction https://t.co/UX1QjmIG61 @HSI_DC
— U.S. Attorney DC (@USAO_DC) February 6, 2025
In 2020, Patel had already been convicted and sentenced to 36 months in prison for running Payza, an illegal financial payments platform that handled cryptocurrency transactions. According to court records, he started in the payments industry in 2004 when he launched AlertPay, which later became Payza. The Montreal-based company operated across the US despite not having a license in any state or Washington, D.C.
Under Patel’s leadership, Payza turned a blind eye to high-risk activities. Instead of cracking down on suspicious dealings, the platform continued serving merchants involved in Ponzi schemes, money laundering, MLM scams, money-cycler scams, pyramid schemes, and even steroid distribution.
Binance shuts down Canadian operator’s Bitcoin laundering operation
As part of his sentencing, Patel was supposed to surrender all assets linked to his crimes, but instead, he is said to have lied, claiming he only had $30,000 in retirement savings while secretly sitting on a Bitcoin stash. Before heading to prison, he tried to move Payza’s illicit crypto to Binance, which shut him down. He then opened an offshore account in his father’s name, using a Belize address tied to Payza, and transferred 450 Bitcoin. But the second exchange flagged the funds as suspicious and froze them before he could get away with it.
Patel then contacted the exchange in June 2021 stating: “[i]f this is about me, then realize that I am not beholden to any actions by the USA or any other government authorities. I have paid my dues and I owe nothing to anybody.”
However, investigators had taken steps to seize the assets, coordinating with authorities in the UK to make sure Patel’s Bitcoin stash stayed frozen, blocking his attempt to hide the funds before he could cash in.
As Patel neared release, he had an associate impersonate an attorney to deceive prosecutors, hoping to delay charges until he could flee to Canada. Investigators uncovered the scheme, indicting him in May 2023. He has been in Bureau of Prisons custody since June 2021.
The crypto industry has faced a spate of scams over the past year. In August 2024, the crypto wallet Cryptonator was shut down by the Federal Bureau of Investigations (FBI) and Internal Revenue Service (IRS) alongside the German police, after it was accused of being involved in an international money laundering scheme.
