The Payza scam was conceived by Firoz and Ferhan Patel who launched a payment processing company which operated out of Montreal, Canada. It was marketed as a payment gateway similar to PayPal or Dwollar where individuals could send money to each other and for businesses to receive money for goods or services. The legitimate companies such as PayPal have very strict terms and conditions and cannot offer a full range of services in many countries due to national restrictions. This is where Payza stepped in to fill the gap. There are millions of legitimate companies who need a payment processing company that they can trust to move money internationally. Unfortunately Payza is not a company to be trusted!
The Payza scam was conceived by two
criminally orientated con men who targeted other illegitimate businesses who
needed a processing company which would allow them to accept online payments
for their ill-gotten gains. The first group of companies to be targeted were
those run by Ponzi scheme operators or HYIPs. These High Yield Investment
Programs offer huge returns on initial investments of up to 1000%. There are
often registered offshore or in South America and need an online payment processor
to enable them to receive money from their clients. No other payment gateway
operator would have anything to do with such illegal companies, so it was an
ideal situation for the Patel brothers and their Payza scam who openly targeted
such companies.
Ponzi schemes have been known of since the
early 20th century. Local investors were conned on a relatively
small scale compared with that of today. Digital payment gateways and
processing companies, such as Payza has led to a huge increase because of the ease
and anonymity that can be found online. Many of the early Ponzi schemes
actually started their own digital currencies which they used to help them with
their scamming ways. Eventually, all of these early attempts at digitalisation
failed and resulted in many of the operators been incarcerated for money
laundering. This left a considerable gap in the market for a company that would
deal with these illegal operators. This is when Firoz and Ferhan Patel lintroduced their Payza scam to the unsuspecting cyber world.
How
the Payza scam started
Payza was initially launched to service the
online needs of the HYIPs who needed an online payment system to send and
receive money from their clients. The legitimate companies such as PayPal would
have no dealings with them due to the nature of their business. Payza had no
such qualms about them and in fact openly advertised their services to them.
They charged huge commissions of up to 25% on every dirty dollar that passed
through their gateway and made millions of dollars because of it. They soon
realised that this could be extended to include other illegitimate businesses,
those operated by drug dealers, pornographers and people traffickers. Firoz and
Ferhan Patel were able to use the money which passed through Payza for their
own benefits, often claiming a breach to their terms and conditions which froze
the clients’ accounts until a resolution was found. This very often took up to
six months, by which time, the client’s account was emptied. As criminals
themselves, they were not in a position to challenge this theft of funds. They,
too, became victims of the Payza scam. It is not possible for an illegal drug
dealer to take them to court or sue them.
It was around this time that a British
teenager committed suicide due to the misuse of a drug supplied by one of
Payza’s clients. A member of the British Parliament publically requested the
Patels to stop processing payments on behalf of the drug dealer, but this
request was refused. They claimed to have no idea as to what line of business
their clients were involved with. This was shown to be yet another lie.
Ex-employees have sworn, under oath that each client was categorised as to what
business they were involved in; drug dealers, illegal arms dealers,
pornographers, people traffickers or Ponzi operators. All payments to and from
their accounts were recorded and documented. They made millions of dollars from
the misery caused by their clients’ dealings.
Legitimate businesses and individuals were
next to get caught up in the Payza scam. PayPal cannot offer a full range of
services in many countries, due to no fault of their own. Some people who
needed to move money internationally were drawn into using Payza as a way to
complete their financial transactions. The same methods of fraud were used on
this new batch of victims in that their accounts were allowed to operate
smoothly for up to six months before the email was despatched informing them of
an “alleged” breach of terms and conditions. The funds within would be frozen,
pending the outcome of the ensuing enquiry . It is well documented that on more
than one occasion the sum of money taken was close to $1,000,000.
The Payza scam made the world headlines in
November 2013 when the US Secret Service became aware that Payza was processing
money on behalf of a child pornographic ring from Canada. In order to avoid the
ensuing scandal, all accounts held by illegally run companies were transferred
from Payza to OboPay which was set up by the Patels for this sole purpose. They
then went onto try and rebrand themselves as a legitimate company with no
dealings with illegal operations. The US Secret Service instructed the FBI and
The Department of Homeland Security to seize all US assets held by Payza. This
affected millions of ordinary citizens who suddenly had no access to their
accounts. Many have since stated that they never saw their money again, and
consider themselves victims of the Payza scam.
One of the main reasons that this scam was
so effective was that it initially targeted illegitimate businesses who
basically operated beneath the law. They had no licenses to conduct financial
transactions or the authority to do so. They openly stole as much as they
wanted, without fear of legal redress, and used the money to finance their
other business interests. They also filled the gap which was left after the
collapse of the new digital currencies which had been used by the HYIPs as a
means of running their businesses.
They subsequently crossed The Atlantic and
rebranded their company under the umbrella of a British company, MH Pillars.
The Payza scam would continue under a new name. They have also turned their
attention to the emerging Asian markets as a possible target for another Payza
scam.
