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5 Arrested in Global Money Laundering Scheme

May 28, 2013
Arrests in money laundering scheme

Five people were arrested and 20 million dollars seized from bank accounts in seven countries in the investigation of an online bank that was founded as a criminal venture to launder money, US officials alleged Tuesday.

Preet Bharara, US attorney for Manhattan, said that Costa Rican-incorporated Liberty Reserve SA's "existence was based on a criminal business model."

Liberty Reserve's online domain was seized by US law enforcement. Since its establishment in 2006, the transnational online payment processor and money transfer system has processed an estimated 55 million transactions for 1 million users, 80 per cent of them outside the United States.

The company's transactions totalled 6 billion dollars during that time, making it probably the largest-ever US money laundering case, authorities said. The investigation was led by the US Secret Service, assisted by tax authorities and other government agencies.

"Liberty Reserve has become a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking," the indictment said.

Assets were frozen in Spain, Costa Rica, the Netherlands, US, Hong Kong, Morocco and China.

Five current and former executives of Liberty Reserve were arrested Friday and charged with violating numerous anti money laundering statutes and operating as illegal money transmitters. Two more defendants are named in arrest warrants but not yet in US custody.

Liberty Reserve's principal founder, Arthur Budovsky, and his top deputy, Azzeddine el-Amine, were arrested in Spain. Co-founder Vladimir Kats and technology specialist Mark Marmilev were arrested in New York. Maxim Chukharev, another technology specialist, was arrested in Costa Rica.

Budovsky and Kats were both convicted in 2006 in New York state court of operating an unlicensed money-transmitting business, the Justice Department said.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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