Major money-laundering ring busted, claims US



Reuters

Published — Thursday 30 May 2013

Last update 30 May 2013 3:44 am

| نسخة PDF Print News | A A

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.

What's happening around Saudi Arabia

JEDDAH: A Saudi citizen was killed in shelling fired across the border from Yemen into the southwest of Saudi Arabia on Sunday, local media reported.A shell fell on a house around dawn in Najran province, civil defense department spokesman Ali bin Om...
JEDDAH: Female voters in Al-Ahsa have urged the authorities handling the municipal elections to drop the condition of presenting the national identity card while enrolling themselves in the voters’ list. Some women in Madinah too have appealed for mo...
JEDDAH: After the recent incident of a rat eating from a bowl at a well-known food outlet in a Jeddah mall came to light, residents have called for food hygiene ratings of restaurants and roadside eateries across the city.Although the municipality wo...
JEDDAH: A muezzin (one who recites the Adhaan) of a Riyadh mosque recently sprung a surprise in the Austrian tourist town of Zell am See by his Adhaan after taking permission from members of a musical band.Social media is abuzz with the news and vide...
RIYADH: A Sri Lankan national, who works as a cleaner in the Kingdom, was commended and rewarded by the Saudi Commission for Tourism and National Heritage (SCTNH) for returning a bag containing gold to its owner.“Prince Sultan bin Salman, president o...
RIYADH: Bangladesh State Minister for Foreign Affairs Mohammed Shahriar Alam arrived in Jeddah on Sunday to meet with his Saudi counterpart Nizar Madani on Monday.On arrival at the royal terminal, the minister was received by Director General of the...
RIYADH: A report of the Saudi Commission for Tourism and National Heritage predicts the rate of growth in job opportunities in the country's tourism sector between 2010 and 2020 will be 10 percent a year as compared to a global growth rate of 2.5 per...
JEDDAH: Two million meningitis vaccines have been distributed among health centers in 20 governorates and provinces across the Kingdom for domestic Haj pilgrims.It is mandatory for all pilgrims to be vaccinated against meningitis and for those coming...
JEDDAH: The Makkah governorate has announced four new road projects linking Makkah and Jeddah. The new roads will facilitate smoother and faster travel between the cities.An estimated 35 million people will benefit from the projects, which will inclu...
JEDDAH: A major disaster is waiting to happen in the fish market of Madinah because of the callous attitude of traders toward handling of gas cylinders. A visit to the market presents a dreadful picture of cylinders kept on top of each other without...
JEDDAH: Information and Culture Minister Adel Al-Toraifi has approved the appointment of Khalid Bo-Ali as editor in chief of the Eastern Province-based Alsharq Arabic newspaper. He was nominated for the post by the board of directors of the newspaper...
JEDDAH: Jamil Farsi, head of the Gold and Jewelry Committee at the Jeddah Chamber of Commerce and Industry (JCCI), says he expects 3,000 job opportunities to be created for Saudi women in the jewelry design and gold sector across the Kingdom, with ab...
JEDDAH: More than 50 visually challenged people successfully performed Umrah with the help of the Ebsar Foundation for the Visually Impaired and the Ambassadors of Volunteers organization under their program “Umrah for the visually impaired,” which w...
JEDDAH: Although the Ministry of Labor is opening its doors to receive complaints from private sector employees, many Saudi females employed in cosmetic and perfume shops in Madinah are not making complaints about being overworked due to fear of losi...
JEDDAH: Health Minister Dr. Khaled Al-Falih is set to increase the number of beds in all private sector hospitals, as per new implementation regulations adopted this year.The move will help address the problem of delays in public sector projects, as...

Stay Connected

Facebook