A Montreal entrepreneur is set to spend an additional three and a half years in a U.S. prison for hiding tens of millions of dollars worth of bitcoin in an undeclared account following an earlier cryptocurrency-related criminal conviction.

The businessman, Firoz Patel, was sentenced Thursday in a Washington, D.C., federal court on one count of obstructing an official proceeding, ending the latest chapter of a circuitous criminal case.

In 2012, Patel launched the firm that would become known as Payza, which prosecutors said had scant due-diligence protocols and became a magnet for criminal proceeds from Ponzi schemes, illicit steroid sales and multilevel marketing scams across the globe.

“Payza, through its robust network of shell companies and criminal associates, became the preferred method for criminals to launder illicit proceeds and transfer funds to other criminal associates,” according to prosecutors. 

Patel was initially sentenced in 2020 on a conspiracy charge relating to money laundering through Payza. Patel declared that his only assets amounted to $30,000 in a retirement savings account. Authorities say they remained in the dark about Patel’s stash of 450 bitcoin, now worth more than $40 million. 

In the months before he reported to prison in 2021, Patel covertly amassed bitcoin in a Binance virtual currency wallet, but the company moved to close the account after it raised red flags. Patel then moved the funds to a U.K.-domiciled account at Blockchain.com, according to court records. Prosecutors said he opened the account in his father’s name. 

After being blocked from accessing those funds, in June 2021, Patel filed a legal claim against Blockchain.com in U.K. court using his real name, thus “abandoning the pretense that the funds belonged to anyone else,” according to prosecutors. 

That October, as a part of the International Consortium of Investigative Journalists’ Pandora Papers investigation, the Canadian Broadcasting Corporation and the Toronto Star revealed that Patel, who was then in prison, had set up an offshore company while under criminal investigation years prior. 

Three months later, U.S. federal investigators worked with British authorities to seize Patel’s bitcoin.

Responding to questions from reporters at the Toronto Star in 2021, Patel suggested that the U.S. charges to which he pleaded guilty would not be considered a crime in Canada. 

“There needs to be intent to launder funds, and there was no intent to run a [money transfer] company without the requisite licences, therefore the foundation of the money laundering allegation is false,” Patel said at the time in an emailed statement.

He also told the reporters that his firm that was revealed in the Pandora Papers was intended for legitimate purposes and never conducted any business.

Last Friday, Patel filed a motion to appeal his latest sentence. A lawyer representing Patel declined a request for comment.

The billionaire son-in-law of former Kazakhstan president Nursultan Nazarbayev is reportedly in talks to pay about $1 billion to the state in connection with a government probe. 

Bloomberg has reported that Timur Kulibayev, a former top energy sector official married to Nazarbayev’s second daughter Dinara, is negotiating a deal that is part of an investigation into wealth accumulated during his father-in-law’s rule. 

Under such an agreement, Kulibayev would make a combination of payments and investments, Bloomberg said, quoting two unnamed sources. The deal would not include any admission of wrongdoing, Bloomberg said.

Separately, the online media publication Orda.kz quoted a source saying the $1 billion payout could include investments in two oil services firms.  

Kulibayev, whose fortune along with his wife’s is estimated at more than $10 billion, according to Forbes, declined to comment through his lawyers. He held several high-level government posts during his father-in-law’s rule of oil-rich Kazakhstan, which ended in 2019 after nearly 30 years. Kulibayev and his wife are majority owners of Halyk Bank, Kazakhstan’s largest lender.

 

 

A representative for Kulibayev at the London-based law firm Schillings declined to comment directly about any proposed agreement, saying it was inappropriate to discuss Kazakh government affairs.

“Mr. Kulibayev is a patriot, dedicated to the sustainable development and future success of Kazakhstan through extensive in-country investment, job-creation, and philanthropy,” the representative wrote in a statement to ICIJ on Feb. 7. “Across diversified holdings and his work with the Halyk Charitable Foundation, he has significantly contributed to the country’s economic and social development over the last 35 years.

He continues to engage with the government to establish how best to accelerate this progress in the coming years. It is categorically incorrect to refer to any contributions as asset recovery.”

Asset recovery generally alludes to a government program to reclaim funds that wealthy, politically influential people allegedly obtained improperly during Nazarbayev’s rule.  Previously Kulibayev’s lawyers have denied that he did anything improper to accumulate his wealth, which he says he built on merit and business savvy, not on family or state connections. 

“Mr Kulibayev has never been charged with criminal conduct by the Government of Kazakhstan, the Asset Recovery Committee of the General Prosecutor’s Office in Kazakhstan or any other Kazakh authority,” his attorneys wrote on Jan. 8 in response to ICIJ questions about any agreement.  

Kazakhstan authorities declined to comment on the Bloomberg story or to confirm or deny earlier reports that Kulibayev had reached an out-of-court settlement to turn over about $1 billion to the state. The asset recovery committee in the prosecutor’s office told ICIJ that information about such agreements is confidential and classified by law.

Last November, the BBC and other media republished information from a Telegram post suggesting Kulibayev had struck a $1 billion deal to return assets to the state. 

The reports came two weeks after the International Consortium of Investigative Journalists sent detailed questions to Kulibayev and his attorneys asking about his business interests and the role Western oil companies may have played in helping him acquire wealth during his father-in-law’s tenure.

Mr Kulibayev strongly denies any suggestion that he improperly benefitted from Caspian pipeline contracts,

— London-based law firm Schillings to ICIJ

As part of their Caspian Cabals investigation published on Nov. 22, ICIJ and 26 media partners reviewed tens of thousands of leaked and public documents and interviewed hundreds of sources, including company insiders and former executives, about the rise of a critical pipeline in the Caspian Sea region and the Kazakh oil fields that feed it. The ICIJ-led investigation revealed how Western oil companies — including Chevron Corp., ExxonMobil Corp., Shell PLC and Italy’s Eni S.p.A. — ignored bribery risks and massive cost overruns to secure their stake in the Kazakhstan-Russia pipeline, then delivered substantial control of it to the Kremlin. 

The investigation showed that the Western oil firms approved financial dealings with companies partly or previously owned by Kulibayev, who helped oversee the rise of Kazakhstan’s energy sector during his father-in-law’s administration.

Kulibayev’s representatives denied he had used his influence to gain access to pipeline contracts and disputed that he had been a gatekeeper for the oil industry. They called ICIJ’s story inaccurate and defamatory, and said it was causing their client financial losses.

“Mr Kulibayev strongly denies any suggestion that he improperly benefitted from Caspian pipeline contracts,” Schillings wrote in a Dec. 19 letter to ICIJ. “Mr Kulibayev also strongly denies any allegations of wrongdoing made by third parties quoted in this article.” 

The lawyers also said Kulibayev had nothing to do with two contracts explored in ICIJ’s article.“Mr Kulibayev is a transparent businessman,” the lawyers wrote on Dec. 4.

In 2022, the government under Nazarbayev’s  handpicked successor, Kassym-Jomart Tokayev, vowed to clamp down on the theft of state assets, face down oligarchs and redistribute the nation’s wealth more evenly.

ICIJ found that Kulibayev’s empire has included more than 220 companies and trusts in 22 countries, including 10 secrecy havens. He and his wife jointly own a majority of Kazakhstan’s biggest bank, and as his wealth expanded, so did his real estate empire, which includes a U.K. mansion once owned by Prince Andrew.

In 2022, Kulibayev’s charitable foundation donated $4.2 million to government-commissioned health, education and other programs, according to his lawyers. That was part of $103 million they said his Halyk Charitable Foundation received from him and his companies since 2016. Humanitarian causes supported by the foundation include approximately $65 million to help flood victims in Kazakhstan’s Atyrau region starting in early 2024.

Days after the publication of Caspian Cabals, Kazakh media reported that the Asset Recovery Committee under the Prosecutor General’s Office had recently filed a lawsuit against Kulibayev, whose assets have been classified as state secrets, according to media outlet Orda. The government offered no details and declined to say which assets may be in question.

Delaware Gov. Matt Meyer (D) encouraged Republicans in Washington to “govern with compassion” amid threats to slash funding from the Department of Education.

In an interview on NewsNation’s “The Hill Sunday” with Chris Stirewalt, Meyer said he is in favor of looking at ways to balance the budget and reduce wasteful government spending. But he said there’s a lot of “uncertainty” about whether programs that support poor children in his state will last.

“I believe in efficient spending of federal money,” Meyer said, noting that he cut property taxes as a county executive.

“The challenge that we’re seeing now, I’m trying to balance the budget. I’m trying to invest in Delaware. I’m trying to make historic investments in our schools, so those NAEP scores, those assessments of the progress of our children, can both go up and that equity can increase,” he said. “So everyone’s getting an equal shot.”

Meyer said it’s “a lot harder” for families who can’t rely on the status of certain federal programs, like Title I, which supplements state and local funding for “low-achieving children, especially in high-poverty schools,” according to the Department of Education.

Meyer said Title I is “really giving kids and families, working families, a shot at making it, of ending cycles of poverty.” Similarly, Meyer stressed the importance of the Individuals with Disabilities Education Act, which he said provides more than $30 billion to ensure children with disabilities get appropriate public education suited to their needs.

“Right now, there’s uncertainty, based on the president’s statement about that, those resources may be going away,” Meyer said. “We’re hoping it’s replaced with other money.”

“Quite frankly, if the rules change, I’m fine with that. If it increases the efficiency of our federal, of my federal tax dollars, as a taxpayer, I like that,” he continued. “But let’s not leave anybody behind.”

“Let’s govern with compassion while we’re making these changes,” he added.

The Wall Street Journal on Monday was the first to report Trump is looking at executive actions to move programs from the Department of Education to other federal agencies, cutting the number of employees and calling on Congress to pass legislation eliminating the department completely.  

Bills have been introduced multiple times to do just that, but the measures have so far failed to gain significant momentum.

Reports indicate Trump is facing pressure not to make any big moves against the agency until after his Education secretary pick, Linda McMahon, goes through her confirmation hearing.  

The Hill is owned by Nexstar Media Group, which also owns NewsNation.

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Rep. Kevin Hern (R-Okla.), chair of the House Republican Policy Committee, on Sunday defended Speaker Mike Johnson (R-La.) for the delay in unveiling a budget resolution.

In an interview on NewsNation’s “The Hill Sunday” with Chris Stirewalt, Hern said Johnson’s task is especially difficult, noting the GOP can lose virtually no votes in the House, but said he is optimistic that the conference will be able to move forward with a resolution this week.

“When you have the smallest margin in the last 150 years in Congress, we can’t lose a single vote. You think about that for a second, when you have, you know, the people that represent all corners of the country, Speaker Johnson has been working very hard through the weekend to get us where we can notice a budget markup this week so we can move forward with one big, beautiful bill, as President Trump would like,” Hern told Stirewalt.

Johnson, members of his leadership team and an ideological cross-section of lawmakers huddled for hours on Thursday with President Trump and Vice President Vance to discuss a framework for advancing the president’s legislative wish list. These include border funding, immigration policy and an extension of the 2017 tax cuts.

The marathon meeting came days after Johnson was forced to scrap plans to mark up an initial budget resolution amid a conservative revolt over the level of spending cuts. The impasse in the House led top Senate Republicans to announce they would move their effort to enact Trump’s agenda, threatening to steamroll the House.

Johnson reported “very positive developments” after the White House meeting Thursday and sought to push back on the Senate GOP plans, insisting House Republicans were nearing the finish line — even though several thorny issues remained.

Hern echoed that sentiment in the Sunday interview.

“We know how difficult it’s going to be. We understand what the Senate is trying to do, in doing two bills so they move quickly. I believe we’re going to get the budget resolution done so we can start working on the policy,” Hern added.

The Hill is owned by Nexstar Media Group, which also owns NewsNation.

New York’s children and schools could lose vital services to support their educational needs if President Donald Trump and Congress approve the dismantling of the U.S. Department of Education, Gov. Kathy Hochul and U.S. Sen. Kirsten Gillibrand warned on Sunday. 

Over 2.6 million kindergarten through grade 12 students in nearly 5,000 public schools throughout New York stand to lose critical funding if the education department closes, Gillibrand, New York’s junior senator, said during a press conference at P.S. 183 on the Upper East Side.  

The senator explained that services that fall under Title 1 could be cut. Title 1 is a federal program that gives supplemental financial assistance to schools and school districts that have a high percentage of low-income families and pay for programs such as special education, early childhood education, and early intervention services for students and infants with disabilities.

She also said students in the state with disabilities could lose nearly $1 billion in annual support. Extracurricular activities could also be impacted if the federal education department is slashed. 

“You can’t imagine what working families will go through if kids aren’t busy after school and don’t have the support that they need,” Gillibrand said.

Gillibrand said “hundreds, hundreds, and hundreds” of New Yorkers contact her office every day with concerns about their children’s education.

“Since its creation by Congress in 1979, the Department of Education has played a central role in this country by making sure students don’t fall behind their peers; it helps spur economic progress, allows us to stay competitive on the global stage, and allows our economy to have the workers that they need.”

No federal money = tax hikes in New York

Gov. Kathy Hochul, who also attended the press conference, said abolishing the DOE would have a massive impact on New York–including more taxes.

“This is $5.5 billion that the state receives annually from the Department of Education; $3.2 billion goes directly into our budget,” Hochul said, adding that much of it also goes into localities. “If that money is jeopardized, what I can tell you will happen is if localities lose that money, they will have to raise taxes.”

Trump’s call for the department’s overhaul comes at a time when student reading skills continue to fall drastically. The National Assessment of Educational Progress (NAEP), also known as the Nation’s Report Card, shows significant declines in reading that are not back to pre-pandemic numbers.

In fact, last year, average reading scores on the report declined by two points for both fourth- and eighth-grade students compared to 2022. This steepens the three-point decline seen in both grades between 2022 from 2019, the report showed.

However, Randi Weingarten, president of the United Federation of Teachers, said cutting Title 1 funding will only make things worse.

“What Title 1 does is support reading specialists all across NYS to help create and ensure that kids can level up in reading,” she said. “That’s what we’re talking about when say ‘these cuts.'”

What does Trump support?

An Executive Order that Trump signed on Jan. 29, states that he will “support parents in choosing and directing” the upbringing and education of their children. 

“When our public education system fails such a large segment of society, it hinders our national competitiveness and devastates families and communities,” the order states. “For this reason, more than a dozen states have enacted universal K-12 scholarship programs, allowing families, rather than the government, to choose the best educational setting for their children.”

The order alone, however, cannot abolish the U.S. Department of Education. Both houses of Congress must approve legislation to do so. 

According to a city Department of Education spokesperson, it is unclear when or if the proposed federal changes will impact NYC public schools. 

“We have not received guidance from the federal government about the potential impact on our programs or services and will closely monitor ongoing developments,” the spokesperson said.