Firoz Patel’s Crypto Scheme Lands Him in Hot Water Again
Firoz Patel, the Canadian founder of a crypto payments app, has found himself behind bars once again—this time for trying to hide 450 Bitcoin from the authorities. A U.S. judge recently sentenced him to an additional three and a half years in prison for obstructing an official proceeding, adding to the time he’s already serving for money laundering and running an unlicensed crypto business.
Patel, who launched the crypto payment platform Payza, had originally been convicted in 2020 for conspiracy to operate an unlicensed money-transmitting business and for money laundering. As part of his 2020 sentence, he was required to forfeit any proceeds from his illicit activities, including the 450 BTC, worth over $43.5 million at current rates. However, Patel attempted to dodge this obligation, launching a scheme to hide and launder the Bitcoin in question, leading to his latest legal troubles.
The Bitcoin Heist: A Digital Hide-and-Seek Game
Patel’s new sentence stems from his attempts to conceal the Bitcoin he was supposed to forfeit after his initial conviction. In September 2022, Patel pled guilty to obstructing an official proceeding, acknowledging that he tried to hide the funds from the authorities. Federal Judge Dabney Friedrich sentenced him to 41 months in prison, with the Department of Justice confirming the ruling on February 6.
Here’s where it gets even more dramatic: After being sentenced to three years in 2020, Patel was ordered to disclose all the assets he gained from Payza, including any Bitcoin holdings. Instead of complying, Patel falsely claimed that his only asset was a modest $30,000 retirement account.
But things took a turn. Before entering prison, Patel decided to secretly gather Payza’s Bitcoin stash and attempted to deposit it into his Binance account. However, Binance flagged his account, closing it in April 2021. Undeterred, Patel tried again, this time at Blockchain.com, opening an account in his father’s name to transfer the Bitcoin. But the exchange caught wind of the suspicious activity and froze the funds.
Not willing to back down, Patel allegedly instructed a Payza business associate to provide fake identification to the exchange, attempting to unfreeze the assets. But his attempts to outsmart the authorities didn’t end there.
A Fake Lawyer and a Fleeing Plot: Patel’s Desperate Measures
As Patel’s release date approached, he grew desperate. Realizing that investigators were hot on his trail, he enlisted the help of a fake lawyer to deceive prosecutors. His plan? Stall the legal process long enough to buy time for his release so he could flee the U.S. and avoid further prosecution. However, investigators uncovered this plot and indicted Patel again before he was even able to leave the prison gates.
In addition to his new prison term, Judge Friedrich also ordered Patel to forfeit the 450 BTC, along with over $24 million in assets that he had hidden. Blockchain.com, the exchange where the Bitcoin was frozen, is now holding the funds, and Patel is expected to forfeit them as part of the new sentence.
The Payza Saga: A History of Crime and Crypto
Patel’s journey to this point has been a rocky one. Payza, the company he founded, provided crypto payment processing services but did so without the proper licenses. According to U.S. prosecutors, Payza was involved in facilitating payments for money launderers, Ponzi schemes, and even pyramid scams. In 2020, Patel was sentenced to three years in prison for his role in running the unlicensed platform.
While many saw the case as a cautionary tale of how quickly the crypto world can become entangled in crime, Patel’s continued efforts to hide his assets only prolonged his legal battles.
The End of the Line?
With his latest conviction and additional prison time, it seems Patel’s crypto endeavors have come to a definitive end. The 450 Bitcoin that he tried so hard to conceal, along with over $24 million in assets, will now be forfeited, but his legal troubles aren’t over just yet. Patel is set to serve an additional three and a half years behind bars, but his story is a reminder of how criminals are often outsmarted by the very technology they try to exploit.
Patel’s case also highlights the increasing scrutiny of cryptocurrency and its potential for misuse. While many crypto enthusiasts see the technology as a revolutionary financial tool, incidents like this show how it can also be used for illegal activity. As crypto continues to grow in popularity, authorities are likely to keep tightening their grip, ensuring that those who try to hide behind digital currency won’t be able to escape justice.
For Firoz Patel, it’s game over—at least for now. The hidden Bitcoin may be lost, but the lesson remains clear: you can’t run forever, even in the world of crypto.
