Money laundering has reached new heights in the form of digital currency in the billions of dollars moving through cyberspace over the past few years. The alleged culprit is Liberty Reserves, and the liberty it offered was the opportunity to create an online bank account with virtually no questions asked. All it required was a name, an address and a birth date, none of which needed any verification.
US Federal officials, in cooperation with numerous other law enforcement agencies around the world, have announced that the Liberty Reserves money exchange site, incorporated in 2009, has been responsible for transferring at least six billion dollars of ill-gotten gain from activities such as credit card fraud and identity theft, child pornography, free-lance computer hackers and underground gambling and drug-dealing.
The indictment revealed evidence of the biggest online money-laundering operation in history, according to prosecutors. In a news conference earlier this week Preet Bharara, U.S. Attorney in Manhattan, said that the global enforcement manifested in getting this indictment is an indication that the ‘long arm of the law’ is getting longer, as it must if there’s any hope of stemming the tide of illicit banking on the internet, what he called “Wild West” tactics.
According to the New York Times, as of Tuesday May 28 there have been five arrests including that of Arthur Budovsky, the man who launched Liberty Reserves from Costa Rica in 2009 and renounced his U.S. citizenship in 2011; he was arrested in Spain. Two others charged in the indictment are still at large.
The site operated by charging a one percent fee on each transaction, and an additional 75 cents to hide a user’s account number. Prosecutors state that the overwhelming majority of users were criminals; the domain has been confiscated and a number of accounts seized or frozen. However, anyone who carried out legitimate transactions is free to contact Mr. Bharara’s office to get their money back.