Canadian Crypto App Founder Firoz Patel Sentenced to Additional 3.5 Years in Prison for Concealing 450 Bitcoin

Firoz Patel, the Canadian founder of the crypto payments app Payza, has been sentenced to an additional 41 months in prison for attempting to hide 450 Bitcoin, which he was ordered to forfeit as part of his previous conviction for money laundering. The sentencing was handed down by U.S. District Judge Dabney Friedrich in Washington, D.C., on February 6, 2025.

Patel had already been convicted in 2020 for conspiracy to operate an unlicensed money-transmitting business and money laundering related to his operation of Payza. Prosecutors argued that Payza facilitated cryptocurrency payments in the U.S. without the proper licensing, while also aiding individuals involved in money laundering schemes, including Ponzi, pyramid, and multilevel marketing scams.

In 2020, Patel was sentenced to three years in prison and two years of supervised release for his role in running the illegal platform. As part of his sentence, he was ordered to identify and surrender any assets obtained through his illegal activities. However, Patel falsely reported that he had only $30,000 in a retirement account, while attempting to hide a significant stash of 450 Bitcoin—currently worth over $43.5 million.

Shortly after his sentencing, Patel made efforts to conceal the Bitcoin. The Department of Justice (DOJ) reported that Patel attempted to transfer the Bitcoin to various accounts, including a Binance account, which was flagged and subsequently closed by the exchange. He later opened an account at Blockchain.com under his father's name, but the exchange flagged the deposit and froze the funds.

Undeterred, Patel sought to manipulate the situation by instructing a business associate to use fake identification in an attempt to unfreeze the funds. Despite these efforts, the DOJ was able to track his activities, and Patel's plan to evade justice was uncovered.

While serving his original prison sentence, Patel reportedly became aware of the ongoing investigation into his hidden Bitcoin and enlisted the help of an individual to impersonate a lawyer. The fake lawyer was supposed to delay the investigation until Patel could be released from custody and flee the U.S. to avoid further prosecution. However, the plot was uncovered before Patel could carry it out, leading to a fresh indictment and the new sentence.

In addition to the new 41-month prison term, Judge Friedrich also imposed three years of supervised release on Patel and ordered him to forfeit not only the 450 Bitcoin, but also over $24 million. The Bitcoin is currently being held by Blockchain.com.

Patel's case highlights the significant legal risks involved in attempting to hide illicit crypto assets and manipulate legal processes. The outcome serves as a stark reminder of the U.S. authorities' determination to enforce the law in the rapidly evolving world of cryptocurrency.