Largest Money-Laundering Scheme Ever Busted

by Christopher Freeburn | May 29, 2013 9:48 am

prison bars 630[1]On Tuesday, federal prosecutors announced charges against seven people who have been detained in the U.S., Spain and Costa Rica[2] in relation to a $6 billion money-laundering operation.

Starting late last week, international law enforcement agencies conducted raids in the U.S., Sweden, Costa Rica, Panama and Switzerland, seizing assets belonging to Liberty Reserve, an off-shore digital payment processing company founded by Arthur Budovsky, a former American who relocated to Costa Rica to establish the business outside of U.S. regulatory controls, the Associated Press noted.

Budovsky, who was previously convicted for running a financial transfer business without a license in the U.S., was arrested in Madrid on Friday. Costa Rica has become a favored location for shady online operations since the country has no laws regulating online businesses.

The U.S. government claims that Liberty Reserve functioned as a means for criminals to transmit funds without documentation or transparency, allowing funds gained through illegal activities to cross borders. A U.S. Attorney described the business as the largest money-laundering operation ever prosecuted.

According to prosecutors, criminals established accounts using fake names and addresses to send and receive funds. Liberty Reserve officials intentionally designed the operation to give anonymity to money-launders, the government claims.

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  2. who have been detained in the U.S., Spain and Costa Rica:

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