Liberty Reserve Busted

Arch-money launderer Arthur Budovsky and six of his associates were indicted by a Manhattan Federal Court today for laundering more than US$6 billion in a money-laundering scheme described as “staggering” by the presiding judge.

Written by Chris White

The founder of “Liberty Reserve”; a currency system favoured by organized internet criminals was arrested in Spain on Friday while his partner Vladimir Kats was remanded in custody in New York.

The arrest comes on foot of an international inquiry combining the collaborative efforts of several national law enforcement agencies across 17 different countries.

The clamp down follows after the Costa Rica based business was taken offline last week as 3 homes and 5 offices were raided by Costa Rican police, thereby prompting high anxieties among organized money launderers around the globe.

After the raid a notice was written across Liberty Reserve’s website claiming that the web-domain had been “seized by the United States Global Illicit Financial Team.”

Today the Costa Rican Government formally announced that Budovsky had indeed been arrested in Spain after an international arrest warrant was put out after him since he fled the country.

Budovsky’s network is thought to have processed at least 55 million illegal transactions worldwide for one million users including 200,000 in the US.

The US federal indictment read: “The scope of the defendants’ unlawful conduct is staggering.”

Commenting on the news the computer science expert Aditya Sood of Michigan State University said:

“People using Liberty Reserve rely in part on offshore currency centres generally set up in places beyond the reach of US or European law enforcement.

Like other cybercurrencies Liberty Reserve has many legitimate users, but the promise of untraceable transactions has long made it attractive to scammers.

Liberty Reserve operates as a no-questions-asked alternative to the mainstream global banking system, with little more than a valid e-mail needed in order to open an account and move money across international borders.

You don’t need to provide your full details or personal information, or things like that, there’s no way to trace an account. That’s the beauty of the system.”

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