DOJ Files Money Laundering Suit Against Digital Payment Processor Payza
Accused of laundering around USD $250 million in unlawful activities, the digital payment processor Payza, faces a lawsuit filed by the US Department of Justice.
The US Department of Justice has taken strict action against the digital payment processor Payza and has filed a lawsuit accusing the firm of laundering around USD $250 million. According to the Department of Justice, the cryptocurrency-friendly money transfer service company allegedly laundered funds connected to illegal activities including Ponzi schemes, pyramid schemes, and child pornography rings.
The lawsuit was filed back on Nov. 3, 2016, but is disclosed now, accusing Payza and its co-founders for running an unlicensed money transmitter business. The lawsuit named Canadian founder brothers of Payza, Firoz Patel and Ferhan Patel for undertaking illicit activities since the year 2012. The conspirators knowingly laundered funds worth USD $250 million in connection with various criminal activities. The official reports assert that Ferhan Patel was arrested from Detroit on March 18 while his brother Firoz Patel is yet to be arrested.
The company is accused of operating an unlicensed money transmitting business in the District of Columbia, in addition to money laundering.
U.S. Attorney Jessie K. Liu, stated, “The arrest and indictments, in this case, demonstrate that we will vigorously enforce laws meant to protect the American consumer. 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.”
The indictment, though, does not mention the involvement of cryptocurrencies, however, the firm has been offering buying and selling of bitcoin since 2014. The company in a March 19 press release declared that it would offer exchange services for XRP and ethereum, among others, and would begin processing Dash payments.
According to CNN, when the investigation began in 2015, Payza stated that the DOJ was investigating its former partners Obopay. However, later, the indictment made it clear that Payza and its co-conspirators were to be blamed for the illicit activities.
Payza wrote, “As some of you may be aware of already, Payza is currently dealing with some legal matters in the United States. We cannot give any specific details at this time, but please be aware that this is an accusation and it is NOT evidence of guilt. Right now, we are working on a solution to this, and the technical issues we are experiencing, and we do not want you to worry.”
Payza on Twitter informed its users that all funds were safe and accessible through the new website. Since DOJ has seized the company’s website, Payza is using its social media accounts to direct users to a new website with a “.eu” domain address.
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