“The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime,” Assistant Attorney General Leslie R. Caldwell for the Justice Department’s Criminal Division said in a statement. “Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe,” US Lawyer Preet Bharara for the Southern District of New York was cited as saying. According to Prosecutors, Costa Rica-based Liberty Reserve managed an alternative currency that assisted cyber criminals across the globe to circulate, store and launder the yields of illegal activity. The company was a “financial hub” for “Ponzi Scheme” operators, credit card traffickers, identity thieves, hackers and other criminals, authorities stated. The system became functional in 2005, however it was taken down in 2013, Liberty Reserve consisted of more than 5.5 million user accounts including 600,000 in the US, according to the US Department of Justice. When it comes to illegal transactions, it had carried more than 78 million financial transactions with a total value of about $8 billion. The digital exchange process permitted depositors to conceal their identities and it was like Bitcoin and some other digital currencies. The suspect Budovsky was nabbed in Spain in May 2013 and he had discarded his US citizenship and procured Costa Rica nationality in a bid to elude prosecution. In the petition, Budovsky confessed to laundering between $250 million and $550 million in criminal proceeds related to US based Liberty Reserve accounts. Six other people with links to Liberty Reserve “face charges” in the case that involved police and investigators from 17 countries. Co-defendants Maxim Chukharev and Mark Marmilev also pleaded guilty and the duo were sentenced to three and five years in prison.
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