KBH Andelskasse clients convicted in the U.S. for $250 Mio money-laundering scheme

KBH Andelskasse client convicted in US for money launering
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The Swedish Monark Finance AB was one of 183 foreign high-risk customers of collapsed KBH Andelskasse. As was FCA-regulated Moorwand Ltd. In 2018, transactions with these customers triggered 1,645 money laundering alarms. The bank processed €4.1 billion in that year, the majority of which were suspicious and came from these customers. While the Danish prosecutors investigate KBH Andelskasse the Canadian Firoz Patel, beneficial owner of Monark Finance, has been sentenced to a 3-years prison term for money-laundering in the United States. The U.S. conviction is not related, however, to KBH Andelskasse.

The U.S. Case

In March 2018, the U.S. Department of Justice announced the indictment of the brothers Firoz Patel, 46, and Ferhan Patel, 39, the founders and operators of Payza, AlertPay, and Egopay. They were charged with the operation of a money-laundering scheme that processed more than $250 million. The brothers pleaded guilty. On 10 Nov 2020, Firoz Patel was sentenced to 36 months of incarceration, his younger brother Ferhan Patel received an 18-months prison term.

The Patel Brothers were also ordered to forfeit more than $4.5 million that had already been seized by the United States. Moreover, they were also required to forfeit the websites through which they committed their offenses, Payza.com and AlertPay.com.

According to the U.S. indictment, many of the customers of the Patel companies used them to launder the proceeds of criminal activities. According to the U.S. prosecutors, Payza, AlertPay, and Egopay knowingly and willfully transmitted funds derived from criminal offenses. Payza, for example, had numerous merchants which the defendants knew to be Ponzi/pyramid schemes. The MLM review platform behindMLM pointed out that “some of the criminal enterprises Payza provided services for were of the MLM variety. And for a decent amount of time Payza was the go-to processor for MLM underbelly schemes.

The Patel Brothers European activities

Firoz Patel and his brother have also been active in Europe through his Monark Finance which was a client of KBH Andelskasse. Therefore AF Johan Christensen, an investigative journalist at the Danish financial magazine Børsen, asked Firoz Patel for a statement. Apparently, Patel regards himself as a victim of the weak U.S. judiciary and denies any involvement in money laundering activities in Europe.

In the US, anyone can be convicted of all sorts of little things. 90 percent of all voluntary settlements are made with innocent people who strike a deal to plead guilty in order to get a guaranteed solution to the situation. This had never happened in Canada or in Denmark, where the law is not interpreted so weakly.

Firoz Patel statement to Børsen

However, Monark Finance triggered 16 money laundering warnings, but the bank did not report this until after the Danish Financial Supervisory Authority (DFSA) had reported the bank to the police in the autumn of 2018.

The small Danish cooperative bank was controlled by the British Wael Almaree who is also the beneficial owner of FCA-regulated Moorwand Ltd and other regulated e-money institutions. The processing of the KBH Andelskasse and the role of Almaree by the authorities will probably take months, if not years. We will be watching and reporting.

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