Crypto Founder Jailed Again for Hiding 450 BTC

A U.S. federal judge has sentenced Canadian crypto payments app founder Firoz Patel to another 41 months in prison for attempting to conceal 450 Bitcoin (BTC) after being convicted on money laundering charges.

The sentencing, handed down by Judge Dabney Friedrich in Washington, D.C., follows Patel’s September guilty plea to obstruction of an official proceeding, the U.S. Department of Justice (DOJ) announced on February 6.

Patel Hid Millions in Bitcoin After Conviction

Patel, who founded Payza, was originally sentenced in 2020 to three years in prison for running an unlicensed money-transmitting business and facilitating illicit transactions, including those linked to Ponzi schemes and money laundering operations.

As part of his 2020 sentence, Patel was ordered to forfeit any assets gained through Payza, but he claimed to have only $30,000 in a retirement account.

However, prosecutors later discovered that Patel secretly controlled 450 BTC, now worth over $43.5 million, which he tried to launder and hide from authorities.

Failed Attempts to Move BTC Through Exchanges

Shortly after his 2020 sentencing, and before reporting to prison, Patel attempted to move Payza’s Bitcoin holdings to various crypto exchanges:

1. Tried to deposit BTC into Binance, but the exchange flagged and closed his account in April 2021.
2. Opened a Blockchain.com account under his father’s name and attempted to transfer Bitcoin there, but the exchange froze the funds.
3. Instructed a business associate to provide fake identification to Blockchain.com in an effort to recover the frozen funds.

A Fake Lawyer and a Failed Escape Plan

While serving his initial three-year sentence, Patel became aware that authorities were investigating the 450 BTC. In response, he devised an elaborate scheme to hire someone to impersonate a lawyer to deceive prosecutors.

His goal? Buy enough time to get released from prison and flee the U.S. before facing new charges.

However, investigators uncovered the plot before his release, leading to a new indictment that resulted in this latest prison sentence.

Judge Orders Forfeiture of 450 BTC and Millions in Assets

In addition to his new 41-month prison sentence, Patel has been ordered to:

• Serve another three years of supervised release
• Forfeit $24 million in assets
• Surrender the 450 BTC still held by Blockchain.com

With this latest conviction, Patel’s crypto crimes have caught up with him once again, reinforcing that crypto’s pseudonymous nature doesn’t guarantee immunity from the law.