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.


Boko Haram raid kills five in Nigeria: residents

Updated 13 min 23 sec ago
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Boko Haram raid kills five in Nigeria: residents

  • A Boko Haram raid and suicide attack in Tungushe village killed at least five
  • Boko Haram regularly uses suicide bombers, mostly women and young girls, to target areas with civilians

KANO: At least five people were killed and six others injured in a night-time Boko Haram raid and suicide attack on a village in northeastern Nigeria, residents told AFP on Saturday.
A male suicide bomber detonated his explosives among a group of residents sleeping in the open in Tungushe village in Borno state at about 12:15 am (2315 GMT Friday).
The blast was followed by indiscriminate gunfire from Boko Haram militants lurking in the dark, said Mustapha Muhammad, a civilian militia leader in the area.
“Five people have been killed and six others injured in the attack,” Muhammad said by telephone from the village, which lies six kiometers (nearly four miles) north of the Borno state capital, Maiduguri.
Tungushe resident Umara Kyari, who gave a similar casualty toll, said the attackers torched eight thatched houses and three vehicles before stealing about 100 cows.
“Fortunately all the cows returned to the village,” said Kyari. “I think the attackers are not used to herding cows and could not control them.”
Boko Haram regularly uses suicide bombers, mostly women and young girls, to target mosques, schools, bus stations and military locations.
Its nine-year armed violence to establish a hard-line Islamic state in remote northeastern Nigeria has killed more than 20,000 people.
Suicide attacks have increased in Borno state recently, prompting the military commander fighting the militants to offer a five-million-naira ($13,900) reward for information on bomb-making factories in the region.
On June 16, six young girls killed 43 people in suicide attacks in the town of Damboa, 80 kilometers southwest Maiduguri.
On Wednesday, 15 people were injured when two female suicide bombers targeted a market on the edge of a military base in the city.
Nigeria’s army said troops on patrol in the Mafa area, east of Maiduguri, had come across “pockets of fleeing Boko Haram terrorists” on Friday.
“The gallant troops... overpowered the terrorists, killing even of them and recovered weapons,” it said on Twitter on Saturday.
The insurgents are believed to have carried out an attack in Zabarmari village, also in the Mafa area, on Thursday, according to a civilian militia source.