Digital currency dealers charged with money laundering – business – cbc news

The founder of an online currency transfer business was indicted in the United States along with six other people in a $6-billion US money-laundering scheme described as “staggering” in its scope, authorities said Tuesday.

Arthur Budovsky is the founder of Liberty Reserve, a Costa Rica-based website long favoured by cybercrime scammers. How to get away with money laundering He was arrested in Spain on Friday.


International standard for combating money laundering activities A defendant identified as Budovsky’s partner, Vladimir Kats, was in custody in New York.

Authorities say the network processed at least 55 million illegal transactions worldwide for one million users, including 200,000 in the United States. First stage of money laundering They call the international money-laundering case the largest ever.

“The scope of the defendants’ unlawful conduct is staggering,” said an indictment unsealed in federal court in Manhattan. Anti money laundering meaning in hindi ‘Bank of choice’ for criminals

In a statement, Costa Rican police confirmed that Budovsky had been arrested in Spain on money laundering charges and that several premises linked to his company had been raided. Latest news on money laundering A notice pasted across Liberty Reserve’s website Tuesday morning said the domain “has been seized by the United States Global Illicit Financial Team.”

The indictment calls the network “one of the principal means by which cybercriminals around the world distribute, store and launder proceeds of their illegal activity … Money laundering facts including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking.”

Liberty Reserve allowed users to open accounts using fictitious names, including “Russian Hacker” and “Hacker Account.” The network charged a one per cent fee on transactions. Money laundering nigeria No way to trace account

Budovsky and Katz have previous convictions on charges related to an unlicensed money-transmitting business, according to court papers. Money laundering defined After that case, the pair decided to move their operation to Costa Rica, where Budovsky officially renounced his U.S. Money laundering for dummies citizenship, the papers say.

In an online chat captured by law enforcement, Katz admitted Liberty Reserve was “illegal” and noted that authorities in the United States knew it was “a money laundering operation that hackers use.”

Aditya Sood, a computer science doctoral candidate at Michigan State University who has studied the underground economy, described Liberty Reserve 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,” Sood said in a telephone interview. Money laundering meaning in hindi “There’s no way to trace an account. Money laundering statute That’s the beauty of the system.” Arrested in Madrid

Budovsky and another man identified by Spanish authorities as Azzeddine el Amine were arrested Friday at Madrid’s Barajas airport while trying to catch a connecting flight from Morocco to Costa Rica, according to a Spanish National Court official, who spoke on condition of anonymity because court policy forbids him from speaking on the record.

Both men have indicated they will fight any move to send them to the U.S., the official said. Why is money laundering illegal The pair were ordered to remain in prison pending an extradition hearing.

Authorities described Liberty Reserve as being rife with criminals, but the site’s ease of use, low fees and irreversible transactions that deterred fraud also attracted a thriving community of legitimate tech-savvy users in countries with limited access to credit cards.

Mitchell Rossetti, whose Houston, Texas-based ePayCards.com was one of several mainstream merchants that accepted the online-only currency, said his business still had about $28,000 tied up in Liberty Reserve accounts.

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. What is anti money laundering compliance 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 centres based in Siberia and Singapore.

A total of 14 premises were raided in Panama, Switzerland, the U.S., Sweden, and Costa Rica, according to Spanish authorities. Us money laundering laws In Costa Rica, investigators recovered five luxury cars, including three Rolls Royces, Spanish police said. Money laundering convictions Bharara, the federal prosecutor, said authorities had seized Liberty’s computer servers in Costa Rica and Switzerland.