Alleged Money Launderer Extradited

Charged With Helping Crime Rings Launder Billions
Alleged Money Launderer Extradited

More than a year after federal authorities shut down Liberty Reserve, a digital currency and payments service based in Costa Rica suspected of being linked to a money-laundering conspiracy, the U.S. Department of Justice has extradited the company's founder from Spain to the U.S. to face charges (see Feds Shutter Business Tied to Cyberheist).

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Arthur Budovsky was arrested in May 2013 by Spanish authorities after being indicted by a grand jury in New York, but he was not returned to the U.S. until Oct. 10. His arraignment is scheduled for Oct. 14.

Bodovsky faces charges of conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and the operation of an unlicensed money transmitting business. If convicted on all three charges, he faces a maximum sentence of 30 years in prison.

The U.S. Department of Justice alleges that Budovsky, a 40-year-old citizen of Costa Rica, used Liberty Reserve as a front to help crime rings around the world launder billions of dollars. Authorities also allege Liberty Reserve played a key role in the April 2013 $45 million international ATM cash-out scheme that involved the use of prepaid cards compromised in late 2012 and early 2013 through cyber-attacks waged against two Middle Eastern banks (see Detangling the $45 Million Cyberheist).

"Arthur Budovsky allegedly built Liberty Reserve overseas to provide the international underworld with a crime-friendly digital currency and elude the scrutiny of American authorities," says Leslie Caldwell, assistant attorney general in the Justice Department's criminal division.

The indictment alleges Budovsky built and expanded Liberty Reserve as a principal money transfer agent used by cybercriminals to distribute, store and launder proceeds from illegal activity. Liberty Reserve functioned as a bank for the criminal underworld and enabled cybercriminals to conduct anonymous and untraceable financial transactions, prosecutors charge.

Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than 1 million users worldwide, including more than 200,000 users in the U.S., who conducted approximately 55 million transactions totaling more than $6 billion through Liberty Reserve's system.

These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, narcotics trafficking and other crimes, investigators claim.

Budovsky is among seven individuals charged in the indictment. Four co-defendants - Vladimir Kats, Azzeddine el Amine, Mark Marmilev, and Maxim Chukharev - have pleaded guilty and await sentencing. Charges against Liberty Reserve and two individual defendants who have not been apprehended remain pending.


About the Author

Tracy Kitten

Tracy Kitten

Director of Global Events Content and Executive Editor, BankInfoSecurity & CUInfoSecurity

Kitten was director of global events content and an executive editor at ISMG. A veteran journalist with more than 20 years' experience, she covered the financial sector for 10+ years. Before joining Information Security Media Group in 2010, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by CNN.com, ABC News, Bankrate.com and MSN Money.




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