This week the U.S. Immigration and Customs Enforcement’s Homeland Security agency (ICE) has revealed that it is charging two Canadian brothers and the company Payza with illegal money transmission and money laundering charges tethered to cryptocurrency transactions.
Money Transmitters are Required to Register With U.S. Federal and State Agencies
According to a press statement released by ICE, two Canadian brothers and the firm, Payza, are facing legal troubles for unlicensed money services and alleged money laundering. The firm Payza is a payment processor that utilizes bitcoin and other currencies for daily settlement operations. Payza allegedly processed over $250 million USD worth of proceeds stemming from Ponzi schemes, and other criminal activities. The ICE announcement was revealed by the U.S. Attorney Jessie K. Liu and ICE special agent Patrick J. Lechleitner. The two men facing charges alongside Payza are two Montreal, Québec residents Firoz Patel (43) and Ferhan Patel (37).
“The arrest and indictments, in this case, demonstrate that we will vigorously enforce laws meant to protect the American consumer,” explained 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.
Illegal Transmissions Stem from 2012 Until Now
The Patel brothers face conspiracy charges that consist of operating an unlicensed money transmitting business and violating anti-money laundering program requirements. If convicted, each of the brothers face a maximum sentence of more than 25 years. Payza and it’s parent company MH Pillars Ltd. is being charged with one count of illegal money transmission.
The indictment alleges that the brothers and Payza participated in criminal activities from March 2012 until the present. The ICE agency asserts that the brothers through Payza’s services knowingly transmitted funds that were tied to illegal activities.
Both Brothers Continued Illegal Activities Even After Cease and Desist Letters
“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,” ICE details in the press release.
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 ICE report says Payza’s customers participated in multiple types of pyramid schemes and allegedly the Patels opened bank accounts in the United States and laundered their illegal proceeds through those accounts. The law enforcement agency has seized properties and funds tied to these charges. ICE has already confiscated $10Mn USD and states the investigation is still underway. The Patel brothers’ case follow other charges against Americans for illegal money transmission and money laundering crimes.