Canadian Who Hid 450 BTC from U.S. Feds Sentenced to 41 Months in Prison Hassan Shittu | usagoldmines.com

A U.S. federal judge has sentenced Firoz Patel, the Canadian founder of the now-defunct payment platform Payza, to 41 months in prison for obstructing an official proceeding by concealing 450 Bitcoin (BTC), currently valued at over $43 million, from the federal court overseeing his 2020 money laundering case.

This sentencing follows Patel’s 2020 conviction for conspiracy to operate an unlicensed money transmitting business and laundering illicit funds.

Patel, who had already served a 36-month sentence for operating Payza, falsely claimed his only assets were $30,000 in a retirement account while secretly controlling a massive Bitcoin stash linked to his previous crimes.

Instead of complying with a court order to forfeit his assets, he attempted to move the funds through offshore accounts and cryptocurrency exchanges.

Patel’s Criminal History: How Did He Hide 450 BTC?

Firoz Patel’s criminal history dates back to the early 2000s when he co-founded AlertPay, a payment processing service that later evolved into Payza.

The platform became a hub for high-risk financial activities, including Ponzi schemes, pyramid scams, and money laundering operations.

Although Payza claimed to provide legitimate online payment services, it operated without proper licenses in the United States, violating federal financial regulations.

Patel’s illicit operations came under federal scrutiny, culminating in his 2020 conviction. He pleaded guilty to conspiring to operate an unlicensed money transmitting business and launder money, resulting in a three-year prison sentence.

As part of the plea agreement, he was required to forfeit all criminal proceeds. However, instead of complying, Patel devised a sophisticated scheme to conceal his Bitcoin holdings.

Following his sentencing, Patel immediately took steps to safeguard the 450 Bitcoin he had secretly held. Initially, he attempted to deposit the funds into Binance, a leading cryptocurrency exchange. However, Binance flagged his account and closed it in April 2021 due to compliance violations.

Undeterred, Patel transferred the Bitcoin to an account at Blockchain.com registered in his father’s name, using a Belize-based address tied to Payza’s operations.

This exchange also froze the assets upon detecting suspicious activity. Patel then instructed a business associate to provide fraudulent Know-Your-Customer (KYC) documentation in an attempt to regain access to the funds.

While serving his original three-year sentence, Patel became aware of an ongoing investigation into his hidden Bitcoin stash.

As his release date approached, he recruited an accomplice to impersonate a lawyer and engage in deceptive negotiations with the U.S. Attorney’s Office.

He aimed to delay legal proceedings long enough to secure his release and flee to Canada before facing further charges. However, prosecutors uncovered the scheme, and Patel was indicted again in May 2023.

Sentencing and Forfeiture of Bitcoin Holdings

On February 6, 2025, U.S. District Judge Dabney L. Friedrich sentenced Patel to an additional 41 months in federal prison, citing his deliberate obstruction of justice.

In addition to his prison term, Patel will serve three years of supervised release and must forfeit over $24 million, including the 450 Bitcoin currently held by Blockchain.com.

As Patel got his sentence, Alexey Pertsev, a developer linked to the crypto-mixing service Tornado Cash, is set to be released from pretrial detention on February 10, 2025, under electronic monitoring while he continues to fight money laundering charges in the Netherlands.

His release comes ahead of an appeal against a 64-month prison sentence imposed in May 2024 for allegedly laundering $1.2 billion through the platform.

The post Canadian Who Hid 450 BTC from U.S. Feds Sentenced to 41 Months in Prison appeared first on Cryptonews.

This articles is written by : Nermeen Nabil Khear Abdelmalak

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