URGENT >> BULLETIN >>MOVING: Criminal Investigation Involving Obopay And Payza, A Ponzi-Forum Darling
URGENT >> BULLETIN >>MOVING: (Updated 3:03 p.m. EDT U.S.A.) The United States has opened a criminal investigation involving Obopay and Payza, a Ponzi-forum darling.
Details of the probe are unclear. But the office of U.S. Attorney Channing D. Phillips of the District of Columbia confirms on its website that the U.S. Department of Homeland Security through Homeland Security Investigations (HSI) is involved in the investigation. So is the Washington, D.C. Financial Crimes Task Force.
The PP Blog first reported in December 2013 that matters pertaining to Obopay and Payza were under investigation. At the time, however, authorities did not say it was a criminal probe.
In an Oct. 15 update, the U.S. Attorney’s office says a criminal probe is under way and that prosecutors successfully asked a judge to stay civil litigation until early next year.
From the Oct. 15 update by prosecutors under a headline of Obopay/Payza (italics added):
“The United States government, including Homeland Security Investigations and the Washington, D.C. F[i]nancial Crimes Task Force, is currently conducting a criminal investigation. As part of that investigation, the United States Attorney’s Office for the District of Columbia has requested a United States District Judge to pause curr[en]t civil litigation relating to Payza and Obopay. The Judge has paused the litigation until January 22, 2016. Shortly after that date, additional information will be made available on this website about the status of this investigation.”
Prosecutors’ update includes an email link and phone number.
Also see Nov. 28, 2013, PP Blog story: Conflicting Reports Over Status Of U.S. Payza Funds: Frozen? Withheld By Vendor? Seized By Department Of Homeland Security?
We’ve previously reported that the Zeek Rewards receiver is investigating Payza transactions:
https://patrickpretty.com/2015/05/01/zeek-rewards-dawn-wright-olivares-loses-several-motor-vehicles-to-receiver-in-cross-border-ponzi-case-more-actions-coming-against-international-winners-and-vendors/
Now, looks as though certain Payza funds also are at issue in the EAdGear case:
http://law.justia.com/cases/federal/district-courts/california/candce/3:2014cv04294/280945/58/
Patrick
Quick notes: On Sept. 16, 2015, an individual by the name of Andrew Bracken sued both Payza and Obopay in U.S. District Court for the Southern District of New York.
Bracken formerly was associated with BidXCel, according to the complaint.
This involved tens of thousands of dollars from BidXCel allegedly due Bracken but allegedly withheld by Payza/Obopay.
From the allegations:
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9. Plaintiff and/or Bidxcel repeatedly requested that the balance in the account be paid to Bidxcel and/or to Plaintiff personally. Plaintiff and/or Bidxcel made clear to Defendants that the money was required for Plaintiff and/or Bidxcel to remain in business, and subsequently, in order to dissolve and wind down Bidxcel’s affairs.
10. After providing confirmation to Payza that the funds should be released to Bidxcel and/or Plaintiff, Payza refused to do so because the funds were apparently frozen due to a Department of Justice Investigation and through no fault of Bidxcel or Plaintiff. http://www.justice.gov/usao-dc/victim-witness-assistance/obopay-payza. Payza improperly blamed the entire situation on Obopay.
11. The relationship between Payza and Obopaywas symbiotic. On or around early 2012, Payza selected Obopay to distribute its funds throughout the United States. The relevant agency agreement with Obopay provided Payza with the required licensing to operate and provide services to its customers, like Plaintiff, in the United States.
12. In July 2012, Obopay was put up for sale and was subsequently on the verge of bankruptcy by end of 2012.
13. In January 2013, Payza itself invested in Obopay to keep it in operation and to ensure it continued to provide the necessary licenses for Payza’s US operations.
14. Payza belatedly attempted to work with Obopay’s partners to bring the agency agreement into compliance with U.S. regulations. Upon information and belief, the agreement was never in compliance with U.S. regulations even following these efforts.
15. Upon information and belief, Payza knew or should have known that its agency agreement with Obopay was never in compliance with U.S. law.
16. Upon information and belief, Payza likewise knew or should have known that Obopay was an illegitimate provider of the banking services Payza sought to perform through an agency relationship and failed to undertake any reasonable investigation whatsoever to discovery as much. Indeed, Obopay has been sanctioned by state licensing agencies in at least the State of Kentucky.
17. Upon information and belief, Payza nevertheless transferred the client funds of Payza’s US members, including Plaintiff, to Obopay’s account for Payza’s own benefit without taking appropriate inventory of the consequences to Payza’s customers, including Bidxcel and Plaintiff.
18. Obopay eventually issued a termination letter to Payza, which included immediate suspension of the agency agreement.
19. Payza and Obopayhave failed and/or refused, to date, to return the funds to Plaintiff to which he is entitled.
20. Defendant Payza has already been successfully sued and a judgment obtained in Canada based on similar actions as alleged herein for approximate $1,000,000.00.
21. Defendants both remain under investigation by the DOJ.
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Shout out to the ASD Updates Blog:
http://asdupdates.com/wordpress/
Also see March 12, 2013, story at BehindMLM.com:
http://behindmlm.com/companies/bidxcel-bites-the-dust/
Patrick
I like how Payza is on their Facebook page downplaying this for their customers.
“In regards to the latest update on this matter, nothing has changed in the matter of Payza’s legal dispute with Obopay. This is an anticipated development. We hope to be able to share more information regarding this matter as it develops.”