Liberty Reserve SA, whose operators are charged with running a scheme that masked more than $6 billion of criminal proceeds, was designed to help users evade scrutiny, U.S. prosecutors said. <\/p>\n
The digital currency company, unlike traditional banks or legitimate online payment processors, didnt require users to validate their identity and allowed accounts to be opened under fictitious names such as Russia Hackers and Hacker Account, according to prosecutors. <\/p>\n
An undercover agent was able to establish a Liberty Reserve account using the alias Joe Bogus, listing his address as 123 Fake Main Street in Completely Made Up City, New York, said Manhattan U.S. Attorney Preet Bharara. He said the prosecution is believed to be the largest money-laundering case brought by the U.S. <\/p>\n
Liberty Reserve, incorporated in Costa Rica in 2006, operated as essentially a black-market bank, Bharara said yesterday at a news conference announcing the unsealing of an indictment against the company and seven principals. The company, which operated as one of the worlds most widely used digital currency services, facilitated global criminal conduct and was created and structured as a criminal business venture, one designed to help criminals conduct illegal transactions, Bharara said. <\/p>\n
Liberty Reserve, shut by the U.S. through criminal and civil enforcement actions, helped users launder illegal proceeds from crimes or transfer funds among associates, prosecutors said. Liberty Reserves digital currency was used by people committing identity theft, credit card fraud, computer hacking, child pornography and narcotics trafficking, prosecutors said. <\/p>\n
Liberty Reserve had an estimated 1 million users around the world and conducted a total of about 55 million transactions -- virtually all of them illegal -- including 200,000 in the U.S., Bharara said. U.S. investigators have found that criminal rings that used Liberty Reserve to distribute illicit proceeds operated from Vietnam, Nigeria, Hong Kong, China and the U.S. <\/p>\n
Its entire existence was based on a criminal business model, Bharara said at the news conference. <\/p>\n
The global enforcement action that we announced today is an important step toward reining in the Wild West of illicit Internet banking, he said yesterday. As detailed in the indictment, Liberty Reserve was intentionally created and structured to facilitate criminal activity. <\/p>\n
Officials said the case was a series of firsts for U.S. authorities. In addition to being the largest international money-laundering case brought by the Justice Department, it involved the first search warrant executed by American officials against a cloud-based server. Bharara said 30 search warrants were executed during an 18-month investigation. <\/p>\n
Were now entering the cyber age of money-laundering, said Richard Weber, chief of the Internal Revenue Services Criminal Investigation division, who also alluded to Chicago Crime boss Al Capone. If Al Capone were alive today, this is how he would be hiding his money. <\/p>\n
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Originally posted here:<\/p>\n
Liberty Reserve Charged With Money-Laundering Conspiracy<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Liberty Reserve SA, whose operators are charged with running a scheme that masked more than $6 billion of criminal proceeds, was designed to help users evade scrutiny, U.S. prosecutors said. Continue reading