Canadian Fraudster Firoz Patel Sentenced to 41 Months for Bitcoin Laundering Scheme
A Canadian businessman, Firoz Patel, has been sentenced to 41 months in federal prison after attempting to conceal 450 Bitcoin—now valued at over $43 million—in defiance of a court-ordered forfeiture. The 50-year-old Montreal resident had previously been convicted in 2020 for operating an unlicensed money-transmitting business linked to financial crimes, but instead of complying with legal mandates, he embarked on a sophisticated laundering scheme.
The U.S. Department of Justice (DOJ) announced Patel’s sentencing on Thursday, revealing that he pleaded guilty to obstruction of an official proceeding. Along with his prison term, Patel faces three years of supervised release, the forfeiture of the 450 Bitcoin currently frozen at a U.K.-based crypto exchange, and a $24 million forfeiture judgment.
A History of Financial Crimes
Patel was the mastermind behind Payza, an unlicensed online payment platform that facilitated illicit transactions tied to Ponzi schemes and money laundering networks. As part of his 2020 conviction, he was required to disclose and surrender all assets derived from his criminal activities. However, rather than comply, Patel falsely claimed his financial resources were limited to $30,000 in retirement savings, all while attempting to hide his cryptocurrency fortune from authorities.
A Trail of Deception and Failed Attempts
Patel engaged in a complex web of transactions to keep his Bitcoin beyond the government’s reach. Initially, he transferred the funds to Binance, only for the exchange to flag his account and shut it down in April 2021 due to compliance violations. Undeterred, he moved the assets to an offshore exchange using an account in his father’s name, linked to a Belize-based address associated with Payza. However, this exchange also froze the funds, detecting suspicious activity.
With options dwindling, Patel attempted to directly contact the exchange in June 2021, insisting he owed nothing to the U.S. government. But by then, investigators had already taken steps to secure the funds, working with U.K. authorities to ensure the Bitcoin remained inaccessible to him.
A Last-Ditch Effort to Escape Justice
Even while in custody, Patel schemed to regain control of his frozen assets. As his release date neared, he devised a fraudulent legal strategy—recruiting an associate to impersonate an attorney and engage in deceptive negotiations with the U.S. Attorney’s Office. His ultimate goal? Delay proceedings long enough to be released and flee to Canada before facing new charges.
Authorities, however, quickly uncovered the ploy, leading to his indictment in May 2023. Since June 2021, Patel has remained in federal custody, with officials ensuring his Bitcoin stash stays permanently out of his reach.
The Larger Crypto Crime Landscape
Patel’s case highlights the persistent misuse of cryptocurrency for illicit financial activities. According to a report by blockchain security firm PeckShield, the crypto industry suffered $3 billion in losses from hacks and scams in 2024—a 15% increase from the previous year. Of these losses, $2.15 billion came from hacks alone, reflecting a staggering 42% rise compared to 2023, while scams accounted for $834.5 million.
The financial crime wave continues, with authorities cracking down on digital asset fraudsters. Just last week, another Canadian national, 22-year-old Andean Medjedovic, was indicted for allegedly exploiting vulnerabilities in two decentralized finance (DeFi) protocols to siphon $65 million from investors.
As the crypto landscape evolves, so do the tactics of those seeking to exploit it, reinforcing the need for stricter regulatory oversight and enhanced security measures.