A Virtual Money Laundering Scheme For ‘The Criminal Underworld’

Six billion dollars and what might be the biggest money laundering scheme in U.S. history. We’ll investigate.

Preet Bharara, U.S. Attorney for the Southern District of New York, describes a chart showing the global interests of Liberty Reserve, during a news conference in New York, Tuesday, May 28, 2013. (Richard Drew/AP)

Preet Bharara, U.S. Attorney for the Southern District of New York, describes a chart showing the global interests of Liberty Reserve, during a news conference in New York, Tuesday, May 28, 2013. (Richard Drew/AP)

There are so many ways to move money anonymously on the Internet. WebMoney, out of Moscow, will do it. Perfect Money, out of Panama. CashU, in the Middle East.

This week, U.S. prosecutors have gone after Liberty Reserve, out of Costa Rica. Charged its operators with massive online money laundering — $6 billion worth — moving proceeds, they say, of credit card fraud, identity theft, narcotics trafficking, child pornography. It’s the Wild West of banking.

Up next On Point: Blowing open the big, dark world of anonymous online money.

— Tom Ashbrook


Reed Albergotti, reporter for The Wall Street Journal who has been covering Liberty Reserve and who wrote “U.S. Says Firm Laundered Billions.” (@ReedAlbergotti)

Brian Krebs, investigative reporter who blogs on computer security and cybercrime at Krebs on Security. (@briankrebs)

Marcus Asner, former chief of the Major Crimes and Computer Hacking and Intellectual Property Unit for the Southern District of New York. He is currently a litigator and partner at Arnold & Porter LLP (@AP_Arbitration), specializing in white collar criminal defense and cases involving financial fraud, money laundering and cybercrime.

From Tom’s Reading List

The Washington Post: Feds Shut Down Payment Network Liberty Reserve. Is Bitcoin Next? — “Federal prosecutors have shut down Liberty Reserve, an alternative payment network that they say was a $6 billion scam “designed to help criminals conduct illegal transactions and launder the proceeds of their crimes.” (Read the indictment.) This is a case anyone with Bitcoins in their virtual wallet is going to want to watch very closely.

Bloomberg Businessweek: Liberty Reserve Joe Bogus Account Said to Reflect Evasion — “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. The digital currency company, unlike traditional banks or legitimate online payment processors, didn’t 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.”

The Wall Street Journal: Promise And Peril Of Virtual Currencies — “The crackdown on money-transfer service Liberty Reserve highlights the growing challenges virtual currencies face as they gain wider use among businesses and consumers. Such alternative payment methods have the potential to drive down or eliminate the processing costs businesses pay when they accept credit and debit cards. But, recently, some virtual-money firms have been mired in controversy over their lack of compliance with U.S. financial laws and allegations some are involved in illegal activities, such as buying and selling drugs.”

Tweets From During The Show

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Nov 27, 2015
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