Firoz Patel, the founder of the crypto payments platform Payza, has been sentenced to an additional three and a half years in a U.S. prison after attempting to conceal 450 Bitcoin from federal authorities. Patel was previously convicted of money laundering and operating an unlicensed money-transmitting business.
Patel Sentenced for Obstructing Justice
On February 6, the U.S. Department of Justice (DOJ) announced that a Washington, D.C., federal judge sentenced Patel to 41 months in prison after he pleaded guilty in September to obstruction of an official proceeding.
Patel attempted to hide 450 BTC—now worth over $43.5 million—that he was ordered to forfeit as part of his 2020 conviction. At the time, he was sentenced to three years in prison and two years of supervised release for running Payza, which prosecutors said facilitated illegal financial transactions, including money laundering and Ponzi schemes.
Attempts to Launder and Conceal Bitcoin
As part of his 2020 sentence, Patel was required to disclose and surrender any assets gained through Payza. However, he falsely claimed that he only had $30,000 in a retirement account.
Shortly after his sentencing—and before going to prison—the DOJ says Patel attempted to move Payza’s Bitcoin holdings. He first tried depositing the funds into Binance, but the exchange flagged and closed his account in April 2021. Patel then opened a Blockchain.com account in his father’s name and attempted to transfer the Bitcoin there. This deposit was also flagged and frozen. In response, Patel directed an associate to provide false identification to the exchange to regain access to the funds.
While serving his initial three-year sentence, Patel allegedly became aware of the investigation into the 450 BTC and devised a plan to evade further prosecution. Prosecutors say he hired someone to impersonate a lawyer to mislead authorities and buy time until his release, at which point he planned to flee the U.S. However, investigators uncovered the scheme and indicted him before he could be released.
Additional Sentences and Financial Forfeiture
In addition to his new 41-month prison sentence, Judge Dabney Friedrich ordered Patel to three years of supervised release and the forfeiture of over $24 million, along with the 450 Bitcoin currently held by Blockchain.com.
Patel’s repeated attempts to obstruct justice and launder illicit funds ultimately led to a harsher sentence, further solidifying the U.S. government’s crackdown on crypto-related financial crimes.
