Give Me Liberty!

Posted On Friday, May 31, 2013
By: Douglas K. Rosenblum

On May 28, 2013 the Department of Justice announced the unsealing of the largest international money laundering case ever prosecuted.  Arthur Budovsky, the founder of Liberty Reserve, along with 6 co-defendants were indicted in the Southern District of New York for laundering more than $6 BILLION in criminal proceeds.  Liberty Reserve is an online service incorporated in Costa Rica in 2006 and allows electronic transfer of funds effortlessly and anonymously.  The company charged a 1% fee for each transaction and, for an additional $0.75, Liberty Reserve hid the online user’s account number when performing the transaction.  The government’s investigation found that Liberty Reserve was favored by cyber-criminals and was used in a recent $45 million bank heist that drained two Middle Eastern banks through ATMs around the world.

Surprisingly, this is not Budovsky’s first experience in the American criminal justice system.  Budovsky, a Costa Rican national, was indicted in New York in 2006 for operating an illegal financial services company known as Gold Age.  Budovsky was sentenced to 5 years probation following a guilty plea.  So much for specific deterrence!

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