Liberty Reserve indicted for $6 billion in money laundering
The U.S. Department of Justice has indicted online payment processor Liberty Reserve for laundering $6 billion in a series of global transactions, which the agency charges may be the largest international money-laundering prosecution in history.
"Liberty Reserve was intentionally created and structured to facilitate criminal activity. It was essentially a black market bank," said Preet Bharara, U.S. attorney for the Southern District Court of New York, in a press conference Tuesday. "As alleged, it deliberately operated in a way to attract and aid criminals who wish to use digital currency to break the law and launder the proceeds of their crimes."
Liberty Reserve founder Arthur Budovsky was arrested in Brooklyn, New York, on Friday for operating an unlicensed money-transmitting business, along with six other company principals who were arrested in Brooklyn, Spain and Costa Rica.
The DOJ has shut down the Liberty Reserve service, seizing $25 million in funds. The law enforcement agency also seized five Internet domain names, including LibertyReserve.com and four related currency exchange sites. The LibertyReserve.com site went offline Thursday, with traffic first being redirected to a DOJ banner on Tuesday. In addition, 45 bank accounts were restrained or seized and a civil action was filed against 35 third-party exchange websites that operated on behalf of Liberty Reserve.
Helping the DOJ pursue the case were the U.S. Secret Service, the Internal Revenue Service, the Department of Homeland Security's U.S. Immigration and Customs Enforcement (ICE), and the Department of the Treasury, as well as 17 law enforcement agencies from other countries.