An American court has detained a Canadian businessman pending trial following his indictment on charges of laundering millions of dollars in cryptocurrency.
Firoz Patel, 48, is accused of unlawfully transacting 450 Bitcoin valued at $2.4 million (£1.93m) at the time of the transaction shortly before he reported to prison in another case in 2021.
The Department of Justice said on Wednesday (31) that Patel, his brother Ferhan and their company MH Pillars, doing business as Payza, were prosecuted in a District of Columbia court for operating an internet-based unlicensed money service business that processed more than $250 million in transactions.
Through Payza.com, the defendants ran a money-transmitting business and transmitted funds derived from illegal activity, it said.
Both brothers pleaded guilty to operating an unlicensed money-transmitting business and laundering monetary instruments.
In November 2020, Patel was sentenced to 36 months in prison and was given a reporting date.
According to court documents, between his sentencing and reporting dates, Patel transferred 450 Bitcoin, traceable to Payza.com, to an account at a virtual currency exchange in the UK.
The account was opened using someone else’s name and date of birth but with an email address and phone number controlled by Patel.
When the exchange sought additional information about the account and the large deposit, it received a response in the name of someone formerly associated with Payza. The account was ultimately frozen.
The matter is being investigated by the Homeland Security Investigations’ Washington DC field office.
The case is being prosecuted by assistant attorneys Arvind K Lal and Christopher Brown.
