WASHINGTON – Firoz Patel and his brother, Ferhan Patel, the founders and operators of Payza.com, AlertPay.com and Egopay.com, and the company MH Pillars doing business as Payza pled guilty to conspiring to launder money and operating an Internet-based unlicensed money service business that processed more than $250 million in illicit transactions.  Firoz Patel also pled guilty to one count of conspiring to launder monetary instruments for charges related to a case out of the Middle District of Tennessee.  

            The plea, which took place July 17, 2020, in the United States District Court for the District of Columbia, was announced by Acting U.S. Attorney Michael R. Sherwin and Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.

            Firoz Patel, 46, and Ferhan Patel, 39, are Canadian citizens, who operated Payza from offices in Canada. Payza was a money transmitting business, which transferred funds for a fee on behalf of customers across the globe to people within the United States and locations abroad. 

            As part of the plea, the Patel brothers and MH Pillars, Ltd., agreed to forfeit more than $12.5 million.  Firoz Patel admitted to operating a prior money service business, AlertPay, which ignored repeated warnings from state regulators about its unlicensed activities.  Firoz Patel transitioned AlertPay into Payza after Firoz Patel was the subject of a Tennessee indictment for laundering narcotics proceeds through AlertPay.  The defendants admitted that no substantive changes took place during this rebrand.

            Payza had numerous merchants that were “Cyclers” and “MLMs” which the defendants knew to be Ponzi/pyramid schemes.  The defendants admitted to sanitizing Payza’s customers list by removing known illegal merchants, before producing that information to third parties requesting customer information.  For example, a co-conspirator informed Ferhan Patel in a series of emails that he was looking through the merchant list to remove “any merchants who have gross violations such as adult, gambling, drugs, violence ect. [sic]. And what I think is the tricky part: Identify MLM’s that are set up as obvious illegal Pyramid schemes.”  Payza failed to follow its own “Merchant Risk Guideline,” as internal documents revealed specific failures in relation to preventing the taking on/servicing of pyramid and Ponzi schemes.

            The defendants further admitted that Payza struggled to maintain relationship with financial institutions, because Payza so frequently was found to have customers engaged in illegal activity. Firoz Patel’s solution to this was to create a new company, Egopay, which took on all of Payza’s high risk customers. Firoz Patel and Ferhan Patel caused an email to be sent to high-risk Payza customers directing them to migrate their accounts to Egopay.  Ferhan Patel told Firoz Patel that Egopay was a problem in the U.S. because Egopay collected no customer due diligence data which created “obvious money laundering concerns.”  Ferhan Patel further admitted to Firoz Patel that Egopay was classified as a money service business and that it had no know your customer checks in place.  In spite of these known money laundering problems, Firoz Patel continued to allow Egopay to operate freely via the Payza platform.  Ultimately Egopay was shut down by regulators in Belize, after which Payza began again directly servicing many of Egopay’s customers.

            The defendants each admitted that their scheme caused over $250,000,000 to be illegally transmitted and to failing to conduct proper due diligence of their customers.  The defendant lastly acknowledged that their actions were done willfully, knowingly, and with the specific intent to violate the law.

            The Honorable Ketanji B. Jackson scheduled the sentencing for November 10, 2020.

            Further information for victims is available at https://www.justice.gov/usao-dc/victim-witness-assistance/obopay-payza.

            This case was investigated by Department of Homeland Security, Immigration and Customs Enforcement, Washington Field Office, with assistance from the D.C. Financial Crimes Task Force.  The case was prosecuted by Assistant U.S. Attorneys Zia Faruqui and Arvind Lal and former Assistant U.S. Attorneys Kate Connelly and John Marston, with assistance from Paralegal Specialist C. Rosalind Pressley and former Paralegal Specialist Toni Donato; Victim/Witness Advocates Yvonne Bryant and Tonya Jones; Document Management Analyst Basizette Stribling; Legal Assistant Jessica McCormick; and Thomas Royal and Joshua Ellen from the Litigation Support Section.

            WASHINGTON – Firoz Patel and Ferhan Patel, the founders and operators of Payza.com, AlertPay.com and Egopay.com, have been indicted by a federal grand jury in the District of Columbia on charges alleging they operated an Internet-based unlicensed money service business that processed more than $250 million in transactions. 

            The announcement was made today by U.S. Attorney Jessie K. Liu and Patrick J. Lechleitner, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C.

            The indictment was returned earlier this month and unsealed today in the U.S. District Court for the District of Columbia. Firoz Patel, 43, and Ferhan Patel, 37, who live in the area of Montreal, Québec, are charged with one count of conspiracy to operate an unlicensed money transmitting business and to violate anti-money laundering program requirements, one count of a money laundering conspiracy and one count of operating an unlicensed money transmitting business in the District of Columbia.  If convicted, each of the brothers faces a maximum sentence of more than 25 years.

            MH Pillars, Ltd., doing business as Payza, is charged with operating an unlicensed money transmitting business.

            Ferhan Patel was arrested on March 18, 2018, in Detroit. He made his first appearance on March 19, 2018 in the U.S. District Court for the Eastern District of Michigan. He remains held pending further proceedings in the District of Columbia. His brother remains at large.

            “The arrest and indictments in this case demonstrate that we will vigorously enforce laws meant to protect the American consumer,” said 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.”

            “I am proud of the skilled and professional teams of investigators and attorneys involved in today’s indictment and commend their efforts,” said Special Agent in Charge Lechleitner of HSI Washington. “Through this type of routine interagency cooperation we ensure our safe, reliable and just society.”  

            The indictment alleges that the criminal activity took place from in or about March 2012 until the present. The defendants, through Payza.com, are accused of operating a money transmitting business that operated without the necessary state licenses and knowingly transmitting funds that were derived from illegal activity.  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.

            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 investigation is continuing.

            According to the indictment, Payza’s customers included Ponzi schemes, pyramid schemes and a child pornography site.  The Patels opened bank accounts in the United States and laundered their illegal proceeds through those accounts.

            The indictment also seeks forfeiture of any property involved in these offenses or traceable to these offenses.  In addition, the indictment seeks the specific forfeiture of approximately $10 million that has already been seized and frozen.

            Further information is available to the public at https://www.justice.gov/usao-dc/victim-witness-assistance/obopay-payza.

            An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty.

            This case is being investigated by Department of Homeland Security, Immigration and Customs Enforcement, Homeland Security Investigations, Washington Field office.  It is being prosecuted and investigated by Assistant U.S. Attorney Zia Faruqui and Arvind K. Lal, Chief of the Asset Forfeiture and Money Laundering Section. Assistance has been provided by Assistant U.S. Attorneys John P. Marston and Diane Lucas; former Assistant U.S. Attorney Catherine K. Connelly; Paralegal Specialists C. Rosalind Pressley and Toni Donato; Victim/Witness Advocate Yvonne Bryant; Document Management Analyst Basizette Stribling; Legal Assistant Jessica McCormick; and Litigation Technology Specialists Ron Royal and Joshua Ellen.