Money Laundering by Cybercriminals at Liberty

When we think of a criminal enterprise, we usually don't think of it being a bank, though there have been a few, but Liberty Reserve was not an ordinary bank, even in past terms.  Several of its members have pleaded guilty to operating as described in the seizure documents filed by the United States District Court, Southern District of New York, as "the on-line service preferred by cybercriminals around the world for distributing, storing, and laundering the proceeds of their criminal activity..."  Those under indictment are complete with mobster-sounding aliases, and they knew how to operate a global enterprise.  Accounts were seized in Costa Rica, where the operation was based, Cyprus, Russia, Hong Kong, China, Morocco, Spain, Latvia, and Australia.  It operated through shell companies in these countries and, when orginally indicted, told they Costa Rican government that the company was sold, but continued to operate through the shells.   It didn't take long to see through that.

The U.S. government also seized five domain names, including LibertyReserve.com, and enjoined Amazon Web Services, Inc from providing services to Liberty Reserve.  Seizing those operations would provide a lot of information about the customers using Liberty Reserve to launder money.  It may not be on the scale of Silk Road for shere numbers, but it should still make for a lot of leads to Federal agents who are pursuing various aspects of this company.  

January 30 update:  The Justice Department today released the conviction data of the former IT supervisor at the bank.  

Maxim Chukharev, 28, of San José, Costa Rica, pleaded guilty in September 2014 before U.S. District Judge Denise L. Cote, who also imposed today’s sentence.

"According to allegations contained in the indictment and statements made in related court proceedings, Chukharev was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s information technology manager in Costa Rica.  In that role, Chukharev was principally responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s chief technology officer, for maintaining Liberty Reserve’s technological infrastructure. "  So, the IT department of the bank goes down with the management of the institution.