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7 people indicted for $6 bn money laundering scheme

PTI Washington | Updated on November 21, 2017 Published on May 29, 2013

Seven people have been indicted in the United States in a $6 billion money-laundering scheme.

Led by two eminent Indian American legal luminaries, Federal Authorities yesterday announced the charges against the seven.

The network, which had spread its wings to 17 countries, was run by a Costa Rican Company called Liberty Reserve.

Announcing the details of the massive online fraud, the Acting Assistant US Attorney, Mythili Raman said Liberty Reserve processed at least $6 billion for more than a million clients, including 200,000 in the US.

“Liberty Reserve operated, on an enormous scale, a digital currency system designed to provide cyber and other criminals with a way to launder their profits without leaving a trace. Liberty Reserve was a massive criminal enterprise servicing more than one million users globally — including 200,000 in the United States alone,” Raman told reporters.

“The Company’s very purpose was to launder its users’ criminal proceeds through the US and global financial system,” she said.

So committed, in fact, was the principal founder of Liberty Reserve to avoid the reach of US law, that, according to the indictment, in 2011 he formally renounced his US citizenship and became a Costa Rican citizen, telling immigration authorities that he was concerned the software his company was developing “might open him up to liability in the US,” Raman said.

Five defendants were arrested on May 24.

Two other defendants are at large in Costa Rica.

In addition to the criminal charges brought in the indictment, five domain names were seized, namely, the domain name of Liberty Reserve and the domain names of four exchanger websites that were controlled by one or more of the defendants; 45 bank accounts were restrained or seized; and a civil action was filed against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering.

The investigation and takedown involved law enforcement action in 17 countries, including Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada and the US, the Department of Justice said.

The US Attorney Preet Bharara said the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers.

Published on May 29, 2013
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