What makes the Payza scam so effective?

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 20^th 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.

The Payza scam and their 5 worst fraud cases

We hear about fraud cases all the time, but the Payza scam which involved a Swedish cooperative society was one of the largest in recent years.

It began in 2010 when the members of Themko used Payza as the payment processing company to transfer 1.2 million dollars into their parent companies bank account. Terry Gilder: the CEO of Themko contacted Payza to make sure that the transaction had been processed correctly. Imagine his horror when he was told that the money had not arrived on schedule.

He then checked with his own bank and was told that the sum of $1.2 had been withdrawn as agreed. He contacted Firoz Patel at Payza and was told the money had been routed via an investment company in Cyprus called Fiberty. Unbeknown to Terry Gilder, Firoz Patel was the sole shareholder of this company. Suspecting that the situation would get worse, Firoz Patel allowed Fiberty to be taken over by another company called Hamervate. He then told Terry Gilder that despite repeated requests, Fibery could not release the money whilst the take-over was in process. Legal proceedings were brought against Patel and Payza because of this and an ongoing legal battle began.

Another well-documented and highly publicised Payza scam was almost a carbon copy of the Themko scam. This time, Patrick Masse used Payza to transfer $979,000 to his Swiss bank account. Having discovered the cash had not arrived as planned, he was told by Patel that it had been sent to Mexico to a company called Air Temp. Legal procedures were swiftly started which saw the seizure of all Patels assets. His houses, cars and bank accounts, including all accounts controlled by Payza. Firoz Patel realised that this was a serious matter and offered Masse $300,000 to stop the seizure. Surely this was an admittance of his involvement of the Payza scam which he claims he knew nothing about.

Yet another scandal that rocked the Patels’ boat was due to the death of a teenager from drugs supplied by one of Payza’s clients. A British MP contacted Firoz Patel and asked him to stop processing money from the drug dealers: he refused claiming that he doesn’t know the nature of business conducted by his clients. His ex-employees say that all clients are categorised and tagged as to the type of business they are in.

Whilst operating in the USA their dealings came to the attention of the FBI and The Department of Homeland Security. The outcome was the seizure of every US held account and subsequent freezing of all cash that they contained. Yet another Payza scam to hit the world headlines!

Private individuals have experienced loss of capital on a much smaller scale. Monies which are paid into their accounts disappear into thin air. It is effectively stolen by the Patel brothers.

The five cases mentioned above are classed as the largest fraud cases committed through the use of the Payza scam to date. No doubt more will follow!