Page 3 of 9 FirstFirst 12345 ... LastLast
Results 51 to 75 of 209
Like Tree43Likes

Thread: Liberty Reserve owner arrested, charged with money laundering, website offline

  1. #51
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Updated article from TicoTimes.net

    Flashy cars, lavish gifts, multiple identities and armed Russian henchmen for years appeared to be the modus operandi of two naturalized Costa Ricans who ran the now shuttered Liberty Reserve digital currency exchange site (www.libertyreserve.com), operated from Costa Rica since 2006, sources say.

    On Friday, Spanish police working in conjunction with law enforcement in the United States and Costa Rica arrested Budovsky, a Ukrainian-born former U.S. citizen, on suspicion of money laundering and other charges. Police in Costa Rica also raided offices and homes linked to Budovsky in the southwestern San José suburbs of Santa Ana and Escazú and Heredia, north of the capital, on Friday.

    Agents from the money laundering division at Costa Rica’s Judicial Investigation Police and the Prosecutor’s Office’s organized crime unit seized computers, files, three Rolls Royce and Jaguar autos worth half a million dollars, along with other items, according to a news report by Channel 7 TV.

    A Russian national with the last name Chukharev also was arrested, according to a statement issued late Monday afternoon by the Costa Rican Prosecutor’s Office, in response to a Tico Times request. The U.S. is seeking Chukharev’s extradition, the statement said. Neither Chukharev nor his lawyer were available for comment.


    Agents raid a home linked to Liberty Reserve in the southwestern San José suburb of Santa Ana. Screenshots from Telenoticias Channel 7
    Tico Times

    Costa Rican police searched eight sites on Friday, including the offices of companies managed by Budovsky. Those companies are Silverhand Solutions & Technology S.A. (Santa Ana), Worldwide E-Commerce Business S.A., or WEBSA (Escazú), Grupo Lulu Limitada (Escazú), Triton Group A & A, S.A. (Escazú) and Cyberfuel.com (Santa Ana). Police also raided two private homes in Santa Ana and one in Heredia, reportedly belonging to Budovsky and associates.

    “The raided companies are, in some manner, related to Liberty Reserve. Costa Rican authorities seized documental proof and digital information that will be turned over to the U.S., via international penal assistance,” the Prosecutor’s Office statement said.

    “Arthur Budovsky was arrested in Spain on Friday, following a coordinated effort between U.S. and Spanish authorities,” the statement added. “[Budovsky] is the founder of the company Liberty Reserve, who last year renounced his U.S. citizenship and is currently a citizen and resident of Costa Rica.”

    Budovsky, 39, obtained that citizenship by marrying a now 39-year-old Costa Rican woman with the last names Valerio Vargas in June 2008, according to public records. However, Costa Rica’s Immigration Administration has no record of Budovsky entering or leaving the country before May 2011, four years after he received probation in a separate case in New York on charges of operating an illegal financial business, GoldAge Inc.

    The Immigration Administration’s first record of Budovsky has him leaving the country on May 25, 2011, but there is no record of him entering Costa Rica before that date. The latest records show he left Costa Rica on Jan. 27.

    The Tico Times attempted to contact Budovsky and his attorneys through authorities in Spain, but did not receive a response from Spanish officials on Monday.

    A not-so-golden age


    Budovsky’s first run-in with U.S. authorities occurred in July 2006, when he and business partner Vladimir Kats, then 33, were indicted in New York on charges of operating an illegal financial business, GoldAge Inc., a parallel company to Liberty Reserve, from their Brooklyn apartments, according to the U.S. Justice Department. U.S. officials said the two had transmitted at least $30 million to digital currency accounts worldwide since beginning operations in 2002.

    They were sentenced to five years in prison in 2007 for engaging in the business of transmitting money without a license, a felony violation of state banking law. They received five years probation.

    Companies like GoldAge and Liberty Reserve offer users nearly anonymous digital currency accounts, pegged to the U.S. dollar or Euro, with limited documentation of identity required. Deposits are allegedly backed by gold and other precious metals, and customers can withdraw money by requesting wire transfers to accounts anywhere in the world or by having checks sent to individuals.

    U.S. officials have targeted companies like GoldAge and Liberty Reserve for years, saying they are hotbeds for criminal activity including money laundering, drug trafficking and tax evasion. They are also used to shuffle around funds from “high-yield” investment operations, which sometimes are Ponzi schemes disguised as legitimate businesses.

    Liberty Reserve was founded in the U.S. in 2002 and relocated to Costa Rica in May 2006 – two months before the U.S. indictment landed against Budovsky and Kats – according to a document obtained by The Tico Times from Costa Rica’s National Registry.

    The company operated without oversight from any global agency, and was a convenient tool for foreign currency brokers, as it allowed them to bypass local legislation and avoid exchange rate fluctuations, particularly in developing countries. It was also a popular payment-processing site for the multilevel marketing industry. But its lack of oversight also attracted organized criminal elements, prosecutors said.

    “Payment in digital currencies makes it easier for traffickers to launder funds that no longer need to be placed into the traditional financial system. Payment can be immediately forwarded to an international digital currency account, perhaps in payment to the original source of supply, or further layered through multiple digital currency accounts and exchangers until reintegrated into the legitimate economy,” the U.S. National Drug Intelligence Center stated in a 2008 report.

    In Costa Rica, Liberty Reserve S.A. was founded with 10 shares each of ₡10,000 ($20) for a total shareholder value of ₡100,000 ($200). To open a Liberty Reserve account, users needed only to submit a name, address, email address, date of birth and occupation.

    On Tuesday, the Associated Press reported that Liberty Reserve may have been used to launder proceeds from a recent theft of some $45 million from two Middle Eastern banks. “The complaint against one of the Dominican Republic gang members allegedly involved in the theft states that thousands of dollars' worth of stolen cash was deposited into two Liberty Reserve accounts via currency centers based in Siberia and Singapore,” the AP reported.

    Prosecutors also allege that Liberty Reserve was used to launder money from drug trafficking and child pornography sites, according to Costa Rican prosecutor José Pablo González. In addition to Budovsky, González said 10 other Liberty Reserve associates are under criminal investigation.

    The closing of Liberty Reserve’s site on Thursday has left in limbo the fate of perhaps millions of dollars pumped into company accounts from around the world. U.S. officials are expected to issue a statement on the case on Tuesday, but so far it’s unclear how much of the account-holders’ funds still exist, where they are, and how many total users are affected.

    The Costa Rican Prosecutor’s Office would not comment on the closing of the site, nor the fate of funds tied up in Liberty Reserve, citing the ongoing money laundering investigation.

    Red flags and multiple identities

    Another similarity between GoldAge and Liberty Reserve is the alleged use of numerous identities by Budovsky and business associates, according to sources familiar with both operations. In 2002, Budovsky granted an “interview” to Ragnar Danneskjold, described as “editor of Planetgold.com,” in which Budovsky, who says he is married to a “wonderful wife with two beautiful daughters,” announces the May 28, 2002 launch of Liberty Reserve. Asked about the risk of attracting organized criminal elements, he said he “would be only too happy to cooperate with authorities in situations” involving “a murderer, kidnapper, or drug kingpin.”

    A source who has investigated GoldAge said he believes the editor, Danneskjold, is actually Kats, Budovsky’s partner at the time.

    Months before the 2006 indictment, and his probation the following year, Budovsky relocated the company to Costa Rica, where in 2008 he married Valerio Vargas, according to Supreme Elections Tribunal records.

    Kats does not appear to have followed his partner to Costa Rica. Instead, Budovsky, who a source familiar with Liberty Reserve operations said “was the boss,” teamed up with Ahmed Yassine, a Moroccan man who was naturalized as a Costa Rican through a November 2006 marriage to a Costa Rican woman. The two were divorced in March 2010, according to public records.

    Yassine, who reportedly has an explosive temper, lives in Costa Rica, and there is no record that he has left the country in recent years. On a Liberty Reserve company profile from November 2008 (and still online in June 2010), Yassine is listed under the apparent pseudonym Amed Mekovar as Liberty Reserve’s “corporate director,” say sources close to the company.

    “Liberty Reserve was acquired by Amed Mekovar in May of 2006,” the profile states, although there is no mention of Yassine (or Mekovar) in the official company registration document on file at the National Registry.

    Budovsky, despite being a founder and boss at the company, also is not listed on the profile or the National Registry document. However, a source familiar with how the business was managed who asked to remain anonymous said Budovsky used the alias Eric Paltz, whom the profile describes as head of “business development.”

    “Arthur was the boss,” the source told The Tico Times. But Budovsky, Yassine and other employees rarely used their real names in business dealings or in front of outsiders, the source said.

    Sandro Castro, listed on the profile as Liberty Reserve’s head of “Abuse and Business Department inquiries,” is also likely an alias, the source said.

    Public records of the company’s inscription in Costa Rica list a Costa Rican man with the last name Hidalgo as Liberty Reserve’s president.

    Other names on the 2008 company profile appear to be legitimate employees.

    The Tico Times could not reach any of the company officers for comment on Monday.

    Snags

    While Budovsky, Yassmine and other employees of Liberty Reserve in Costa Rica protected themselves with Russian gunmen, according to a source familiar with the company, they reportedly also tried to present a positive image of Liberty Reserve by allegedly lavishing gifts on influential people and donating computers to local schools. But they faced several snags along the way, including the refusal in 2011 by the Financial Institution Superintendency (SUGEF), Costa Rica’s financial regulatory authority, to license the company, citing a lack of transparency and accounting of funding management.

    Nevertheless, Liberty Reserve continued operating, accepting account deposits and transferring funds without SUGEF certification. However, without that approval Budovsky and Yassmine found it increasingly difficult to conduct business through banks in Costa Rica and Panama, which refused to open accounts for the company.

    In the past two years, they decided to move company accounts to Europe, where Budovsky often travelled. The company also relocated its network servers – as many as seven – from Costa Rica to the Netherlands, Switzerland and other countries, a source said.

    But by 2011, the year Liberty Reserve applied for SUGEF authorization, U.S. officials had already started collaborating with Costa Rican officials on an investigation of the company. That probe culminated with last Friday’s arrests, searches and seizures.

    The company has been shut down, and its remaining employees laid off. And customers who placed funds in Liberty Reserve have no idea where their money is, no matter how many times they click “refresh.”
    The only thing necessary for the triumph of evil is for good men to do nothing

  2. #52
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    VULTURE ALERT !! VULTURE ALERT !!



    No room for honour or sentimentality in the HYIP ponzi fraud business
    The only thing necessary for the triumph of evil is for good men to do nothing

  3. #53
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline


  4. #54
    Hypanor is offline Senior Scambuster
    Join Date
    Oct 2012
    Location
    Australia
    Posts
    614
    Blog Entries
    38

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    So many pretty badges!
    Q & A with Terry Stern - Q&A with Terry Stern
    Banners Broker busted in India - Investment firm accused of duping investors
    Spread it on Facebook - Banners Broker Ponzi Scam

  5. #55
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Feds in NY charge 7 in $6B digital currency money-laundering case; Costa Rica, Spain arrests

    NEW YORK — Authorities say the founder of a Latin America-based currency system and six other people have been indicted in the United States in a $6 billion money-laundering scheme.

    Federal prosecutors in Manhattan are expected to announce the charges on Tuesday afternoon.

    Budovsky is the founder of Liberty Reserve, a currency system long favored by cybercrime scammers. He was arrested in Spain on Friday.

    There also were arrests in Costa Rica and New York.

    Authorities say the network processed at least 55 million illegal transactions worldwide. They call the international money-laundering case the largest ever.

    Cordoba reported from San Jose, Costa Rica; Satter reported from London.

  6. #56
    ribshaw's Avatar
    ribshaw is offline Nigerian Ministry
    Join Date
    Feb 2013
    Location
    Internet Cafe Nigeria
    Posts
    5,192

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Quote Originally Posted by Hypanor View Post
    So many pretty badges!
    This was the one that really concerned me as I had never heard of it before.

    Capture.JPG

    Apparently it has something to do with drinking beer, dueling pianos and that bird that shows up when you eat a bowl of Fruit Loops.

    Capture1.JPG

    Or this, had to do a search with quotes and it only yielded one result.

    http://www.oecd.org/corruption/acn/48916988.pdf

    Capture2.JPG
    "It's virtually impossible to violate rules ... but it's impossible for a violation to go undetected, certainly not for a considerable period of time." Bernie Madoff
    https://www.facebook.com/pages/Scam-...98399986981403

  7. #57
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline


  8. #58
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Reprinted here from an article on Las Vegas Sun.com


    NY indictment filed in $6B money-laundering case
    The Associated Press

    Tuesday, May 28, 2013 | 7:06 a.m.

    Authorities say the founder of a Latin America-based currency system and six other people have been indicted in the United States in a $6 billion money-laundering scheme.

    Federal prosecutors in Manhattan are expected to announce the charges on Tuesday afternoon.

    Budovsky is the founder of Liberty Reserve, a currency system long favored by cybercrime scammers. He was arrested in Spain on Friday.

    There also were arrests in Costa Rica and New York.

    Authorities say the network processed at least 55 million illegal transactions worldwide. They call the international money-laundering case the largest ever.
    ___
    Cordoba reported from San Jose, Costa Rica; Satter reported from London.

    THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

    A shadowy electronic currency that underpins a large chunk of the cybercrime economy has been knocked out by law enforcement action on two continents, police in Costa Rica said late Monday.

    Concern had been building on underground Internet forums since Liberty Reserve, a Latin America-based currency system long favored by scammers, went offline last week. In a statement, Costa Rica police confirmed that the company founder Arthur Budovsky had been arrested in Spain on money laundering charges Friday and that several premises linked to his company had been raided.

    A notice pasted across Liberty Reserve's website said the domain "has been seized by the United States Global Illicit Financial Team."

    Liberty Reserve's demise is likely to send a sharp shock across the Internet.

    "It was one the most popular currencies for cybercriminals," said Aditya Sood, a computer science doctoral candidate at Michigan State University who has studied the underground economy.

    Sood said Liberty Reserve operates as a no-questions-asked alternative to the global banking system, with little more than a valid email needed to open an account and start moving money across borders.

    "You don't need to provide your full details, or personal information, or things like that," he said in a telephone interview. "There's no way to trace an account. That's the beauty of the system."

    People using Liberty Reserve rely in part on offshore currency centers, generally set up in places beyond the reach of U.S. or European law enforcement, which broker transactions moving cash in and out of the mainstream financial system. Like other cybercurrencies, Liberty Reserve has many legitimate users, but the promise of untraceable transactions has long made it attractive to scammers.

    Sood said that despite prominent disclaimers warning against money laundering, the way Liberty Reserve was set up meant that currency centers typically had little in the way of serious oversight.

    "Cybercriminals don't provide their real credentials," Sood said, leaving brokers in the dark about who was sending what where.

    "They have no idea where the money is coming from or where the money is going," he said. "That's how they designed the model."

    Liberty Reserve appears to have played an important role in laundering the proceeds from the recent theft of some $45 million from two Middle Eastern banks, according to legal documents made public by U.S. authorities earlier this month.

    The complaint against one of the Dominican Republic gang members allegedly involved in the theft states that thousands of dollars' worth of stolen cash was deposited into two Liberty Reserve accounts via currency centers based in Siberia and Singapore.

    The Costa Rica police statement said that they raided three homes and five businesses linked to Liberty Reserve and seized papers and digital documents that will be turned over to U.S. authorities.

    Budovsky, who became a Costa Rican national after giving up his U.S. citizenship, has been in trouble before, the statement added, explaining that he was sentenced in 2007 to five years' probation after pleading guilty in a New York court to charges he operated an illegal financial services business similar to Liberty Reserve.

    U.S. authorities didn't return phone messages from The Associated Press seeking comment Monday, which was a public holiday in the United States.

    Sood said there might be a short term drop in cybercrime activity as scammers who used to rely on Liberty Reserve readjusted their finances, but he cautioned that new forms of cybercurrency would soon take its place.

    "Even if one system is taken down, we can't expect that there will be no more systems," he said.

    ___
    The only thing necessary for the triumph of evil is for good men to do nothing

  9. #59
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline


  10. #60
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    The only thing necessary for the triumph of evil is for good men to do nothing

  11. #61
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    they did not get them all.

  12. #62
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Quote Originally Posted by niksam View Post
    they did not get them all.
    yet

    ......................
    The only thing necessary for the triumph of evil is for good men to do nothing

  13. #63
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    The only thing necessary for the triumph of evil is for good men to do nothing

  14. #64
    kschang is offline Senior Scambuster
    Join Date
    May 2012
    Posts
    866

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Servers are not seized yet. They appear to be in some European country. It'll take more paperwork to grab them.

    This server hopping is nothing new. TVI Express moved their hosting around from US to somewhere in Ukraine (Kiev if I remember right) and called it an "upgrade".
    ---
    A MLM Skeptic (not a Cynic) covering scams, critical thinking, and psychology
    http://amlmskeptic.blogspot.com

  15. #65
    kschang is offline Senior Scambuster
    Join Date
    May 2012
    Posts
    866

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Confirmed by Reuters, almost everybody was arrested:

    In addition to Budovsky, who was arrested in Spain along with his deputy, Azzedine El Amine, 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 were still at large in Costa Rica according to officials: Ahmed Yassine Abdelghani and Allan Esteban Hidalgo Jimenez. According to the indictment, almost all of the men used the alias, Eric Paltz.
    U.S. accuses cyber exchange of laundering $6 billion | Reuters
    ---
    A MLM Skeptic (not a Cynic) covering scams, critical thinking, and psychology
    http://amlmskeptic.blogspot.com

  16. #66
    Hypanor is offline Senior Scambuster
    Join Date
    Oct 2012
    Location
    Australia
    Posts
    614
    Blog Entries
    38

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Quote Originally Posted by ribshaw View Post
    Apparently it has something to do with drinking beer, dueling pianos and that bird that shows up when you eat a bowl of Fruit Loops.
    Hmm, duelling pianos - that would have changed the whole tone of the movie Deliverance.

    Secret Service busts $6 billion money laundering scheme | Fox News
    Q & A with Terry Stern - Q&A with Terry Stern
    Banners Broker busted in India - Investment firm accused of duping investors
    Spread it on Facebook - Banners Broker Ponzi Scam

  17. #67
    Hypanor is offline Senior Scambuster
    Join Date
    Oct 2012
    Location
    Australia
    Posts
    614
    Blog Entries
    38

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Its made the news in Australia today also - local bank Westpac has been caught up in it

    According to the indictment, three Westpac accounts held in the name of Technocash Ltd contained $US36.9 million ($A38.4 million).
    Q & A with Terry Stern - Q&A with Terry Stern
    Banners Broker busted in India - Investment firm accused of duping investors
    Spread it on Facebook - Banners Broker Ponzi Scam

  18. #68
    littleroundman is offline Administrator
    Join Date
    Jun 2010
    Posts
    17,453

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    US prosecutors have announced what they say is the biggest international money laundering prosecution in history – a $US6 billion ($A6.2 billion) trail that allegedly includes $US36.9 million ($A38.4 million) deposited in Westpac Bank accounts.

    The trail was allegedly left by Costa Rica-based Liberty Reserve, a currency-transfer and payment-processing company that allowed customers to move money anonymously from one account to another via the internet with almost no questions asked, and has travelled through 17 countries, including the Westpac accounts in Australia.

    One person was registered under the name of "Joe Bogus" and the address "123 Fake Main Street" in "Completely Made Up City, New York."

    Prosecutors described Liberty Reserve as a "financial hub of the cyber crime world ... one of the principal means by which cyber criminals around the world distribute, store and launder proceeds of their illegal activity ... including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking."

    "The scope of the defendants' unlawful conduct is staggering," officials said. Over roughly seven years, Liberty Reserve processed 55 million illicit transactions worldwide for 1 million users.

    Prosecutors said 45 bank accounts have been restrained or seized.
    According to the indictment, three Westpac accounts held in the name of Technocash Ltd contained $US36.9 million ($A38.4 million).

    'Bank of choice'


    The Liberty Reserve network "became the bank of choice for the criminal underworld," US Attorney Preet Bharara said in announcing the unsealing of an indictment against the defendants, including founder Arthur Budovsky, an American who renounced his US citizenship after deciding to set up in Costa Rica.

    Unlike traditional banks or legitimate online processors, Liberty Reserve did not require users to validate their identities, it is alleged.

    It allowed users to open accounts using fictitious names, including "Russian Hacker" and "Hacker Account." One person was registered under the name of "Joe Bogus" and the address "123 Fake Main Street" in "Completely Made Up City, New York."

    "The only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes – the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers and traffickers,"
    said Bharara. "It was the opposite of a know-your-customer policy."

    Cyber-age laundering


    "We're now entering the cyber age of money-laundering," said Richard Weber, chief of the Internal Revenue Service's Criminal Investigation division, who also alluded to Chicago Crime boss Al Capone. "If Al Capone were alive today, this is how he would be hiding his money."

    The company operated one of the world's most widely used digital currencies, allowing users to send and receive "instant, real-time currency," according to the indictment in US federal court in Manhattan.

    Digital currency, such as Bitcoin, was developed as a way to make anonymous transfers over the internet without paying fees to a bank. The

    US Justice Department warned as early as 2008 that criminals would increasingly rely on the digital currency industry to launder and move funds because it facilitates financial transactions outside the rules of the traditional banking system.

    The alleged crimes involved only Liberty Reserve and its operators, and not any other digital currency, Bharara said.

    "The actions brought today relate only to Liberty Reserve and no other system," Bharara said. "We're not taking any position on virtual currency generally and we're not taking any position with respect to any particular other company that engages in something that may look on the surface that something that Liberty Reserve was doing."

    Arrests


    Five of the seven defendants were arrested last week in a global swoop.

    Budovsky, 39, was arrested in Spain, co-founder Vladimir Kats, 41, was arrested in Brooklyn, New York, while two other defendants, Ahmed Abdelghani, 42, and Allan Jimenez, 28, remain at large in Costa Rica, prosecutors said.

    The names of the defendants' attorneys were not immediately available.

    "The global enforcement action we announce today is an important step towards reining in the Wild West of illicit internet banking,"
    said Bharara. "As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth."

    A notice pasted across Liberty Reserve's website on Tuesday morning said the domain "has been seized by the United States Global Illicit Financial Team." As of Wednesday morning, the website is no longer accessible. Attempts to reach Liberty Reserve by phone and email were not immediately successful.

    Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the internet's largest payment processor and money transfer system serving millions of people around the world.

    Prosecutors alleged Liberty Reserve was used extensively for illegal purposes, providing an infrastructure that enabled cyber criminals around the globe to conduct untraceable financial transactions.

    The network charged a 1 per cent fee on transactions through "exchangers" – middlemen who converted actual currency into virtual funds and then back into cash.

    It is alleged when US authorities began to investigate the company, the defendants pretended to shut it down.

    But it is alleged that they continued operating "and moved tens of millions of dollars through shell company accounts maintained in Cyprus, Russia, China, Hong Kong, Morocco, Spain, Australia and elsewhere".

    Budovsky and Kats have previous convictions on charges related to an unlicensed money-transmitting business, according to court papers. After that case, the pair decided to move their operation to Costa Rica, the papers said.

    In an online chat captured by law enforcement, Kats admitted Liberty Reserve was illegal and noted that authorities in the US knew it was "a money-laundering operation that hackers use".

    Legitimate users


    While authorities described Liberty Reserve as being rife with criminals, the site's ease of use, low fees and irreversible transactions that deterred fraud also attracted legitimate users.

    Mitchell Rossetti, whose Houston-based ePayCards.com was one of several mainstream merchants that accepted Liberty Reserve's online-only currency, said his business still had about $US28,000 tied up in Liberty Reserve accounts.

    "The irony of this is I went to them because of the security,"
    Rossetti said. "All sales were final."

    He acknowledged that the currency was being used by scammers but said Liberty Reserve funds were just like any other currency: "The US dollar can be donated to a church or it can pay a prostitute."

    Liberty Reserve appears to have played an important role in laundering proceeds from the recent theft of some $US45 million from two Middle Eastern banks, according to documents made public by authorities earlier this month. In that scheme, thieves stole debit card information and then used it to drain cash from thousands of ATMs around the world in a matter of hours.

    As part of the Liberty Reserve investigation, authorities raided 14 places in Panama, Switzerland, the US, Sweden and Costa Rica. In Costa Rica, investigators recovered five luxury cars, including three Rolls-Royces. Bharara said authorities also seized Liberty's computer servers in Costa Rica and Switzerland.

    The seven defendants are each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years jail.

    They're also charged with one count of conspiracy to operate an unlicensed money transmitting business and of operation of an unlicensed money transmitting business. Both of those charges carry a maximum jail term of five years.

    The Age.com.au
    The only thing necessary for the triumph of evil is for good men to do nothing

  19. #69
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    I guess 5 years is not a big term for scale of operations such as this.

    Let's wait till authorities realize there is no $6B and most of the "currency" was just virtually created with injections by exchangers owned by LR guys themselves.
    - Money from a thin air.

    I think charges of fraud will also be added later on.

  20. #70
    kschang is offline Senior Scambuster
    Join Date
    May 2012
    Posts
    866

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Actually I *do* believe that they are "trying" to run an honest business, but the anonymous nature attracted all the unsavory players.

    There are plenty of informal money exchangers. Didn't they shut down the "Bharani Network" out of middle east as funnel for illicit funds for Al Qaeda?
    ---
    A MLM Skeptic (not a Cynic) covering scams, critical thinking, and psychology
    http://amlmskeptic.blogspot.com

  21. #71
    NikSam is offline AntiCon Artist
    Join Date
    Dec 2012
    Posts
    2,258

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Quote Originally Posted by kschang View Post
    Actually I *do* believe that they are "trying" to run an honest business, but the anonymous nature attracted all the unsavory players.

    There are plenty of informal money exchangers. Didn't they shut down the "Bharani Network" out of middle east as funnel for illicit funds for Al Qaeda?
    No way, multiple Identities, fake names, Interviewing each other, owning exchanges All of it beginning since 2000 - none of that seem like they were ever tried to run anything honest.

    Not many people in CR even knew his real name, even employees did not.

    Add on it recent events when they were denied in a license from CR SUGEF, they set up a fake review portal for SUGEF, which only showed them data they wanted them to see, at the end in 2011 they even faked that LR is no longer in CR by closing offices and continuing operations from the Villa.

    How any of it is honest ? Maybe Budovsky marriage is for CR citizenship only, he just needed to run away from US.

  22. #72
    okosh's Avatar
    okosh is offline Senior Member
    Join Date
    Jan 2011
    Location
    Tassi Australia
    Posts
    3,387

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Quote Originally Posted by NikSam View Post
    I guess 5 years is not a big term for scale of operations such as this.

    Let's wait till authorities realize there is no $6B and most of the "currency" was just virtually created with injections by exchangers owned by LR guys themselves.
    - Money from a thin air.


    I think charges of fraud will also be added later on.
    Would not be the first time that a pay processor was basically a ponzi....
    Anyone remember Altergold??...
    ʎɐqǝ uo pɹɐoqʎǝʞ ɐ ʎnq ı ǝɯıʇ ʇsɐן ǝɥʇ sı sıɥʇ

  23. #73
    kschang is offline Senior Scambuster
    Join Date
    May 2012
    Posts
    866

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Haqqani Network, not Bharani. My mistake.

    There's "honesty" in general, then there's "honor among thieves". ;) I guess my point is IMHO they didn't build LR to be a Ponzi scheme. They are "honest" in the sense that they don't tell you lies about your money grows and then steal your money. They simply nickel and dime you to death with fees... in the open. All that alias and such can be seen as trying to get away from the "oppressive" US regime. Their mistake, basically is taking over too much of a bank's functions (i.e. behave like a bank) but without doing any of a bank's paperwork, like tracking people for money laundering and regulatory stuff.
    ---
    A MLM Skeptic (not a Cynic) covering scams, critical thinking, and psychology
    http://amlmskeptic.blogspot.com

  24. #74
    path2prosperity's Avatar
    path2prosperity is offline Elite Scambuster
    Join Date
    Jan 2011
    Location
    London UK
    Posts
    3,576

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    Quote Originally Posted by okosh View Post
    Would not be the first time that a pay processor was basically a ponzi....
    Anyone remember Altergold??...
    I remember that one which only lasted for a very short time. Do you remember who was behind it? It was pimped on ASA for a week or two.

  25. #75
    kschang is offline Senior Scambuster
    Join Date
    May 2012
    Posts
    866

    Re: Liberty Reserve owner arrested, charged with money laundering, website offline

    ---
    A MLM Skeptic (not a Cynic) covering scams, critical thinking, and psychology
    http://amlmskeptic.blogspot.com

Page 3 of 9 FirstFirst 12345 ... LastLast

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Disclaimer: Opinions expressed on this website are solely those of their respective authors.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42