Feds Bust Massive Online Money-Laundering Scheme
Seven charged in $6B Liberty Reserve operation
By Newser Editors and Wire Services
Posted May 28, 2013 5:56 PM CDT
Preet Bharara, U.S. Attorney for the Southern District of New York, describes a chart showing the global interests of Liberty Reserve, during a news conference in New York, Tuesday, May 28, 2013.    (Richard Drew)

(Newser) – Calling it perhaps the biggest money-laundering scheme in US history, federal prosecutors charged seven people today with running what amounted to an online, underworld bank that handled $6 billion for drug dealers, child pornographers, identity thieves, and other criminals around the globe. The case was aimed at Liberty Reserve, a currency-transfer and payment-processing company based in Costa Rica that authorities say allowed customers to move money anonymously from one account to another via the Internet with almost no questions asked.

US officials said the enterprise was staggering in scope: Over roughly seven years, Liberty Reserve processed 55 million illicit transactions worldwide for 1 million users, including 200,000 in the US. The 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 Liberty Revenue founder Arthur Budovsky, an American who renounced his US citizenship after deciding to set up in Costa Rica. The network charged a 1% fee on transactions through middlemen known as exchangers, who converted real currency into virtual funds and then back into cash. Click for why this might be bad news for Bitcoin.)

Copyright 2016 Newser, LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
Feds Bust Massive Money Laundering Scheme is...
7%
18%
4%
29%
37%
5%
Show results without voting
You Might Like
Comments
Showing 3 of 52 comments
Lefty_Libby
May 30, 2013 1:45 PM CDT
Last year I attended a women's group. We talked about the violence women and children undergo everywhere. Most of the women had abusive partners (and most of them were religious fundamentalists). I said to the group, while we're meeting, a child is being raped and murdered, a teenager's been stolen for trafficking, a women's been kidnapped for torture by a sadist. Your situations are not special. Horror is happening around us every moment, and that's how it's always been. Unfortunately, it isn't in my nature to be a psychopath like the amoral mass murdering rich. How I wish! It's so frustrating to see poor criminals prey on one another. Since it doesn't bother them to kill, why can't they make themselves useful and pick some decent targets!
Buckshot
May 29, 2013 10:19 AM CDT
In the old days the "bank robbers" came in from the outside today they all work in the bank. That's a huge "bust" and good news it's a job well done!
SgtBarrett
May 29, 2013 7:43 AM CDT
The only difference between this bank and other Banks is that they didn't have US Gov backing. The government has a monopoly on corrupt banking and the Government hates competition.