Major money-laundering ring busted, claims US

Updated 30 May 2013
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Major money-laundering ring busted, claims US

NEW YORK: US prosecutors have filed an indictment against the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $ 6 billion in illicit funds linked to everything from child pornography to software for hacking into banks.
The indictment unsealed on Tuesday said Liberty Reserve had more than a million users worldwide, including at least 200,000 in the United States, and virtually all of its business was related to suspected criminal activity.
US Attorney Preet Bharara called the case perhaps “the largest international money laundering case ever brought by the United States.”
“Liberty Reserve has emerged as one of the principal means by which cyber-criminals around the world distribute, store and launder the proceeds of their illegal activity,” according to the indictment filed in US District Court for the Southern District of New York.
Officials said authorities in Spain, Costa Rica and New York arrested five people on Friday, including the company’s founder, Arthur Budovsky, and seized bank accounts and Internet domains associated with Liberty Reserve.
Switzerland’s Federal Office of Justice said the United States had requested legal assistance on May 16. The Swiss said they complied with the request in full by May 21, seizing a computer server used by Liberty Reserve. The indictment detailed a system of payments that allowed users to open accounts under false names with blatant monikers like “Russia Hackers” and “Hacker Account.”
The use of digital currency has expanded over the past decade, attracting users ranging from video gamers looking for ways to buy and sell virtual goods to those who lack faith in the traditional banking system.
Touted by some investors as the future of money, these virtual currencies have gained the attention of US regulators looking to bring them under anti-money-laundering rules.
The US Treasury said on Tuesday it named Liberty Reserve under the USA Patriot Act as “specifically designed and frequently used to facilitate money laundering in cyber space.” That designation, a first against a virtual currency exchange, prohibits banks or other payment processors from doing business with Liberty Reserve, even under a new name.
The Treasury also said Liberty Reserve’s virtual currency was used to anonymously buy and sell software designed to steal personal information and attack financial institutions.
Liberty Reserve, with around 12 million transactions per year, laundered over $ 6 billion in criminal proceeds since it began operating in 2006, the indictment said.
A ring of hackers who recently stole $ 45 million from two Middle Eastern banks by hacking prepaid debit cards used Liberty Reserve to distribute their take, according to court papers.
Tech blogger Brian Krebs, a former Washington Post reporter who now runs the blog Krebs On Security, wrote on Tuesday “the action against Liberty Reserve is part of a larger effort by the US government to put pressure on virtual currencies.”
Treasury Undersecretary for Terrorism and Financial Intelligence David S. Cohen told a press conference it was a response to a specific abuse of the financial system.


Divided UN council heads to Sweden for farmhouse retreat

Updated 19 April 2018
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Divided UN council heads to Sweden for farmhouse retreat

  • 15 ambassadors will join Secretary-General Antonio Guterres for the secluded getaway in a country setting.
  • The three-day retreat will begin on Friday.

United Nations, United States: After a week of bitter acrimony over Syria, UN Security Council ambassadors are heading to a farmhouse in southern Sweden for a retreat to try to break the deadlock over how to end the war.
US Ambassador Nikki Haley and her Russian counterpart Vassily Nebenzia will be among the 15 ambassadors joining Secretary-General Antonio Guterres for the secluded getaway in a country setting.
The three-day retreat beginning Friday comes after one of the council’s most divisive periods, with the United States and Russia split over the alleged chemical weapons attack in Douma that lead to military action by Washington and its allies against Syria.
The council met five times on Syria last week including on Tuesday when Russia vetoed a US-drafted resolution setting up a chemical weapons probe while two other proposed measures failed to pass.
The Russia-US rivalry prompted Guterres to declare that the Cold War was “back with a vengeance.”
Asked whether he expected awkward moments during the Swedish retreat, Nebenzia told reporters: “I will see how they feel about dealing with me after all that happened.”
“It’s not news to anyone that the council is divided on Syria,” said Sweden’s Deputy UN Ambassador Carl Skau. “There is some need for humility and patience at this moment.”
The council will be staying at Backakra, the summer residence of Dag Hammarskjold, who was the United Nations’ second secretary-general.
The residence located on the southern tip of Sweden, far from Stockholm, is a “fitting and inspiring venue” to reconnect with the power of diplomacy, said Skau.
“It’s a place to roll up our sleeves, take off our jackets and ties and come up with some real and meaningful ways forward,” he said.
The annual brainstorming session usually takes place in upstate New York, but Sweden, which is a non-permanent council member, offered to host this year’s gathering.
Guterres had told council members that the focus of the meeting would be his plan for a “surge of diplomacy” to address conflicts worldwide, but the council’s deadlock over Syria is emerging as the top priority.