This isn't your average online bank account money transfer scheme.
Seven men have been charged for allegedly participating in a huge online money-laundering scam that provided avenues through which drug traffickers, child pornographers and other criminals to transfer money around the world quickly and covertly.
According to the Washington Post, the underground site was run by a Costa Rican company called Liberty Reserve. The network reportedly shuttled more than $6 billion dollars around the world for upwards of a million clients, 200,000 of whom worked out of the United States.
Company founder Arthur Budovsky has been accused of organizing what's being called a "bank of choice," allowing con artists and criminals to participate in one of the biggest money-laundering operations to date.
Liberty Reserve provided open online accounts to anyone, from anywhere in the world, with no information necessary. Users could then deposit or transfer funds to other people who opened accounts with the site.
The system also let money-launderers sell pilfered credit card information to one another, as well as hacker software. Eight con artists working out of New York were charged with stealing almost $45 million from ATMs around the world, using Liberty Reserve to spread out the money.
The site proves how much and how quickly the world of online finance is evolving-Liberty Reserve was only operated by one firm, which allowed the federal officials to find the site with relative ease. What could happen if new sites opened up that were owned by multiple firms across a few platforms? Such a decentralized network would create serious problems for United States authorities.
According to the federal indictment, the site made quite a dent in the underworld of online money-laundering. "Liberty Reserve has become a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity," it read.
Founder Budovsky has a history of working with con artists. In 2006, he was charged with another money-laundering scam called Gold Age, and was sentenced to five years of probation.
He then moved to Costa Rica, getting rid of his United States citizenship and founding Liberty Reserve.
He was arrested in Spain during the weekend. Liberty Reserve's homepage now bears the message that the site was seized by the government.
