A district court in the US has ordered detention of an Indo-Canadian entrepreneur following indictment on charges of laundering 450 Bitcoin (BTC), valued at $24,020,699.83 at the time of the transaction.
The order for Firoz Patel, 48, came on Wednesday, shortly before he reported to prison in another case in 2021.
The two-count indictment, unsealed on May 17, charged Firoz with money laundering and engaging in monetary transactions in property derived from specified unlawful activity.
Judge Dabney L. Friedrich of the US District Court of Columbia ordered that Firoz be detained pending trial, a Department of Justice release said.
Previously, Firoz, his brother Ferhan, and their company MH Pillars, doing business as Payza, were prosecuted in the District Court of Columbia for operating an Internet-based unlicensed money service business that processed more than $250 million in transactions.
Through Payza.com — an internet-based payment service — the defendants ran a money transmitting business that operated without the necessary state licenses and knowingly transmitted funds that were derived from illegal activity.
The brothers each pled guilty to conspiracy to commit crimes against the US by operating an unlicensed money transmitting business and by laundering monetary instruments.
As part of his plea agreement, Firoz was required to disclose all known assets to the US government.
On November 10, 2020, he was sentenced to 36 months in prison and was given a reporting date.
The court also entered a forfeiture judgment for “any property, real or personal, involved in” the offence to which Firoz Patel had pled guilty.
According to court documents, between his sentencing and reporting dates, Firoz transferred 450 BTC, traceable to Payza.com, to an account at a virtual currency exchange in the US.
The 450 Bitcoin would have been subject to forfeiture in Firoz’s previous criminal case.
The virtual currency exchange account was opened using the name and date of birth of Firoz’s father, but with an email address and phone number controlled by Firoz.
When the virtual currency exchange requested additional information about the account and the large deposit, it received a response in the name of an employee of a company in India affiliated with Payza.
The account containing the 450 Bitcoin was ultimately frozen.
Firoz began his career by working at an Indian grocery store owned by his father in Canada.
After finishing his studies and obtaining a degree in Business Administration from the Champlain College in Montreal, he started his online payment solution, AlertPay, which was later renamed Payza.
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