U.S. accuses currency exchange of laundering $6 billion

Wed May 29, 2013 9:40am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Emily Flitter

NEW YORK (Reuters) - U.S. prosecutors have filed an indictment against the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $6 billion in illicit funds linked to everything from child pornography to software for hacking into banks.

The indictment unsealed on Tuesday said Liberty Reserve had more than a million users worldwide, including at least 200,000 in the United States, and virtually all of its business was related to suspected criminal activity.

U.S. Attorney Preet Bharara called the case perhaps "the largest international money laundering case ever brought by the United States".

"Liberty Reserve has emerged as one of the principal means by which cyber-criminals around the world distribute, store and launder the proceeds of their illegal activity," according to the indictment filed in U.S. District Court for the Southern District of New York.

Officials said authorities in Spain, Costa Rica and New York arrested five people on Friday, including the company's founder, Arthur Budovsky, and seized bank accounts and Internet domains associated with Liberty Reserve.

Switzerland's Federal Office of Justice said the United States had requested legal assistance on May 16. The Swiss said they complied with the request in full by May 21, seizing a computer server used by Liberty Reserve.

The indictment detailed a system of payments that allowed users to open accounts under false names with blatant monikers like "Russia Hackers" and "Hacker Account".

The use of digital currency has expanded over the past decade, attracting users ranging from video gamers looking for ways to buy and sell virtual goods to those who lack faith in the traditional banking system.   Continued...

 
Preet Bharara, United States Attorney for the Southern District of New York, describes charges against Costa Rica-based Liberty Reserve, one of the worlds largest digital currency companies and seven of it's principals and employees for allegedly running a $6 billion money laundering scheme at a news conference in New York, May 28, 2013. REUTERS/Mike Segar