- Mar 16, 2013
- 582
Global Cyber Money Scam Worth $6bn Busted
Prosecutors uncover what is believed to be the largest international money laundering case ever brought by the United States.12:31pm UK, Wednesday 29 May 2013
The operators of digital currency exchange Liberty Reserve have been accused of helping international criminals launder more than $6bn (£3.9bn) in illicit funds.
US prosecutors allege the funds are linked to everything from child pornography to software for hacking into banks.
An indictment unsealed on Tuesday said Liberty Reserve had more than a million users worldwide, and virtually all of its business was related to criminal activity.
Attorney Preet Bharara said it was "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 the US District Court for the Southern District of New York.
Officials in Spain, Costa Rica and New York arrested five people, including the company's founder, Arthur Budovsky.
International authorities have also seized bank accounts and internet domains associated with Liberty Reserve.
The indictment details a system of payments that allowed users to open accounts under false names with blatant monikers like "Russia Hackers" and "Hacker Account".
Indictment US money laundering scam
The indictment alleges that almost all business was related to crime
The use of digital currency has expanded in 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.
Touted by some investors as the future of money, these virtual currencies have gained the attention of US regulators looking to bring them under anti-money laundering rules.
The US Treasury says it named Liberty Reserve under the USA Patriot Act as it had been "specifically designed and frequently used to facilitate money-laundering in cyber space".
That designation, a first against a virtual currency exchange, prohibits banks or other payment processors from doing business with Liberty Reserve, even under a new name.
The Treasury also says Liberty Reserve's virtual currency was used to anonymously buy and sell software designed to steal personal information and attack financial institutions.
Liberty Reserve, with around 12 million transactions per year, laundered over $6bn in criminal proceeds since it began operating in 2006, the indictment said.
Preet Bharara describes charges against Costa Rica-based Liberty Reserve, one of the worlds largest digital currency companies at a news conference in New York
Attorney Preet Bharara explains the alleged money laundering scam
A ring of hackers who recently stole $45m from two Middle Eastern banks, by hacking prepaid debit cards, used Liberty Reserve to distribute their take, according to court papers.
On Tuesday, Liberty Reserve's website displayed the message: "This domain name has been seized by the United States Global Illicit Financial Team."
Budovsky was arrested in Spain along with his deputy, Azzedine El Amine, while co-founder Vladimir Kats was arrested in Brooklyn, New York.
Two technology designers, Maxim Chukarev and Mark Marmilev, were also arrested, Chukarev in Costa Rica and Marmilev in New York.
Two more company employees - Ahmed Yassine Abdelghani and Allan Esteban Hidalgo Jimenez - were still at large in Costa Rica, according to officials.
According to the indictment, almost all of the men used the alias Eric Paltz.
http://news.sky.com/story/1096745/global-cyber-money-scam-worth-6bn-busted
Prosecutors uncover what is believed to be the largest international money laundering case ever brought by the United States.12:31pm UK, Wednesday 29 May 2013
The operators of digital currency exchange Liberty Reserve have been accused of helping international criminals launder more than $6bn (£3.9bn) in illicit funds.
US prosecutors allege the funds are linked to everything from child pornography to software for hacking into banks.
An indictment unsealed on Tuesday said Liberty Reserve had more than a million users worldwide, and virtually all of its business was related to criminal activity.
Attorney Preet Bharara said it was "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 the US District Court for the Southern District of New York.
Officials in Spain, Costa Rica and New York arrested five people, including the company's founder, Arthur Budovsky.
International authorities have also seized bank accounts and internet domains associated with Liberty Reserve.
The indictment details a system of payments that allowed users to open accounts under false names with blatant monikers like "Russia Hackers" and "Hacker Account".
Indictment US money laundering scam
The indictment alleges that almost all business was related to crime
The use of digital currency has expanded in 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.
Touted by some investors as the future of money, these virtual currencies have gained the attention of US regulators looking to bring them under anti-money laundering rules.
The US Treasury says it named Liberty Reserve under the USA Patriot Act as it had been "specifically designed and frequently used to facilitate money-laundering in cyber space".
That designation, a first against a virtual currency exchange, prohibits banks or other payment processors from doing business with Liberty Reserve, even under a new name.
The Treasury also says Liberty Reserve's virtual currency was used to anonymously buy and sell software designed to steal personal information and attack financial institutions.
Liberty Reserve, with around 12 million transactions per year, laundered over $6bn in criminal proceeds since it began operating in 2006, the indictment said.
Preet Bharara describes charges against Costa Rica-based Liberty Reserve, one of the worlds largest digital currency companies at a news conference in New York
Attorney Preet Bharara explains the alleged money laundering scam
A ring of hackers who recently stole $45m from two Middle Eastern banks, by hacking prepaid debit cards, used Liberty Reserve to distribute their take, according to court papers.
On Tuesday, Liberty Reserve's website displayed the message: "This domain name has been seized by the United States Global Illicit Financial Team."
Budovsky was arrested in Spain along with his deputy, Azzedine El Amine, while co-founder Vladimir Kats was arrested in Brooklyn, New York.
Two technology designers, Maxim Chukarev and Mark Marmilev, were also arrested, Chukarev in Costa Rica and Marmilev in New York.
Two more company employees - Ahmed Yassine Abdelghani and Allan Esteban Hidalgo Jimenez - were still at large in Costa Rica, according to officials.
According to the indictment, almost all of the men used the alias Eric Paltz.
http://news.sky.com/story/1096745/global-cyber-money-scam-worth-6bn-busted
