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"Crypto Launderer's 41-Month Sentence: $43M Bitcoin Seized"

Coin WorldFriday, Feb 7, 2025 9:37 am ET

1min read

A Canadian man, Firoz Patel, has been sentenced to 41 months in federal prison for attempting to launder 450 Bitcoin, now worth over $43 million, after his 2020 conviction for running an unlicensed money-transmitting business. Patel, 50, of Montreal, pleaded guilty to obstruction of an official proceeding after he was caught laundering crypto proceeds instead of complying with a court-ordered forfeiture.

U.S. District Court Judge Dabney L. Friedrich handed down the sentence, including three years of supervised release, forfeiture of 450 Bitcoin (plus any accrued interest) currently frozen at a crypto exchange in the U.K., and a $24 million forfeiture judgment. Patel, who once ran an unlicensed online payments platform called Payza, had already been convicted in 2020 for processing illicit transactions linked to Ponzi schemes and money laundering operations.

As part of his 36-month sentencing, Patel was required to disclose and surrender all assets tied to his crimes. Instead, he misled the court, claiming his finances were limited to $30,000 in retirement savings, when in reality, he was sitting on a Bitcoin fortune. Patel moved the funds across crypto exchanges in an attempt to keep them beyond the government’s reach.

First, he funneled the Bitcoin into Binance, but the platform flagged and shut down his account in April 2021, citing compliance violations. Patel then shifted the stash to an offshore exchange using an account in his father’s name and linked it to a Belize-based address used for Payza. That exchange also froze the funds, recognizing the transaction as suspicious.

Patel, growing increasingly desperate, contacted the exchange in June 2021 and insisted he owed nothing to the U.S. government. However, investigators had already taken steps to seize the assets, working with authorities in the U.K. to ensure the stash remained frozen. Even behind bars, Patel attempted to regain control of the frozen crypto.

As he neared his release date, he orchestrated a legal charade—recruiting an associate to pose as an attorney and engage in fraud negotiations with the U.S. Attorney’s Office. The goal? Stall the case long enough to walk free and flee to Canada before facing new charges. Authorities

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