Thread: Liberty Reserve owner arrested, charged with money laundering, website offline

Reported on TicoTimes.net

The story was known about Budovsky and Katz (2 ukrainans) started LR in Brooklyn NY,
after being arrested they orchestrated the sale of LR to a new formed Costa Rican company,
but were actually still behind it all the time.

Looks like authorities finally figured it out.

Costa Rican prosecutor José Pablo González said Budovsky, a Costa Rican citizen of Ukrainian origin, has been under investigation since 2011 for money laundering using a company he created in the country called Liberty Reserve.

Sounds like they had it "figured out" several years ago, but needed to be able to prove it.

What's going to be interesting over the coming days and weeks is watching how many HYIPs disappear due to their accounts being frozen and how many HYIP owners use the seizures to simply take the money and run.

It is more interesting to see how and when if possible distribution of frozen assets will happen.
LR was used mostly for illegal stuff.
And I believe LR never had enough assets in banks to back up their system's "credits".

Wow. This is really good news.

I wonder if it it will be a warning to STP and the others.

Perfect Money been declared illegal by Panamanian authorities earlier this year.
http://www.supervalores.gob.pa/infor...ance-corp.html
And thats from a country which PM claims they based in.

Panamanian authorities also said that the address in Panama is not theirs, and PM is not located there.


there is also some Russian connection with PM in the past.

Now it is interesting to read HYIP bloggers sites. One has just published a poll. Let's see how much people lost with Liberty Reserve.
http://blog.hyip-pulse.com/breaking-...een-shut-down/

Lookie here

Perfect Money now rushed in to announce that they will not take US residents as clients anymore:

Recent changes in Perfect Money Policy
25.05.13

Dear Perfect Money Customers,

We bring to your attention that due to changes in our policy we forbid new registrations from individuals or companies based in the United States of America. This includes US citizens residing overseas. If you fall under the above mentioned category, please do not register an account with us.


We apologize for inconvenience caused.

URL: https://perfectmoney.com/news_view.html?id=342

whois on LR in 2005, before the first arrest

LR_WHOIS_2005.jpg

I have my nomination for this year's Darwin Awards!

imdone imdone is offline
Newbie Amateur

Join Date: May 2013
Posts: 8
Default I'm going to do suicide
Libertyreserve have left me with this one and only option. If their site does not comes online within a week i will do suicide on a live cam. Libertyreserve officials and US govt will be responsible for my death.

I am broken and they took my money. I don't have a penny now and my whole family runs on my income.

I am serious about it, please don't make fun.

If anyone knows him, let him know I have a handgun he can borrow.

What's-her-face must be crying in her wheaties today.

Originally Posted by Gregg

I have my nomination for this year's Darwin Awards!
If anyone knows him, let him know I have a handgun he can borrow.

It's because you're merciful, right?

More from TicoTimes.net

Digital currency site Liberty Reserve shut down after arrest of Costa Rican owner in Spain


Posted: Saturday, May 25, 2013 - By David Boddiger and L. Arias
Costa Rican agents raided Liberty Reserve founder Arthur Budovsky’s offices and home in San José and Heredia on Friday.



Panic spread on the Internet Friday as word about Arthur Budovsky Belanchuk’s arrest reached users of his digital currency business Liberty Reserve, which was shut down on Friday.

Budovsky, 39, was arrested on Friday in Spain as part of a money laundering investigation performed jointly by police agencies in the United States and Costa Rica. U.S. officials likely will seek his extradition.

Costa Rican prosecutor José Pablo González said Budovsky, a former U.S. citizen and naturalized Costa Rican of Ukrainian origin, has been under investigation since 2011 in Costa Rica for suspected money laundering using apparent shell companies he created to run Liberty Reserve.

Budovsky relocated to Costa Rica after he and partner Vladimir Kats were indicted on July 27, 2006, in New York on charges of operating an illegal financial business, GoldAge Inc. – a precursor to Liberty Reserve – from their Brooklyn apartments, according to the U.S. Justice Department. U.S. officials said the two had transmitted at least $30 million to digital currency accounts worldwide since beginning operations in 2002.

Budovsky and Kats were sentenced to five years in prison in 2007 for engaging in the business of transmitting money without a license, a felony violation of state banking law. They received five years probation.

Officials have not commented on how much money Liberty Reserve accounts handled, nor how many clients are affected by its closing. But those numbers could be higher than in the GoldAge case.

The daily La Nación reported that Budovsky, a naturalized Costa Rican, renounced his U.S. citizenship last year, after the joint investigation began. The Tico Times could not independently verify that information, as Costa Rican government agencies are closed for the weekend.

In 2011, Costa Rica’s financial regulatory authority, the Financial Institution Superintendency (SUGEF), closed Liberty Reserve, citing a lack of transparency and accounting of funding sources, La Nación reported.

However, Budovsky continued operating the company in conjunction with other Costa Rican corporations, including Silverhand Solutions and Technology S. A, Worldwide E-Commerce Business S .A., Grupo Lulu Limitada, Triton Group A and A, S. A. and Cyberfuel.com.

The same year SUGEF ordered Liberty Reserve closed, U.S. prosecutors based in New York asked Costa Rican officials to begin investigating Budovsky and his companies. On Friday, San José prosecutors raided Budovsky’s home and offices in Escazú and Santa Ana, southwest of San José, and in the province of Heredia, north of the capital.

Investigators allege that Budovsky’s businesses in Costa Rica were used to launder funds from child pornography websites and drug trafficking.

Both GoldAge and Liberty Reserve operated under a similar system, allowing users to nearly anonymously open accounts with limited documentation of identity. Deposits are backed by gold and other precious metals, and customers could withdraw money by requesting wire transfers to accounts anywhere in the world or by having checks sent to individuals.

U.S. officials have targeted companies like GoldAge and Liberty Reserve for years, saying they are hotbeds for criminal activity including money laundering, drug trafficking and tax evasion.

“The ability to conduct transactions in digital currencies is constantly available, making digital currencies more convenient than other methods of funds transfer, which may be limited by normal business hours and international time zones. Additionally, digital currency transactions can be conducted from any location or device with Internet access,” a 2008 report by the U.S. National Drug Intelligence Center stated.

“Because most digital currencies are denominated into internationally recognized weights of precious metals, inconveniences traditionally associated with international financial transactions, such as calculating international exchange rates for another nation’s currency, are eliminated,” the report added.

Liberty Reserve, which operated without oversight from any global agency, was a convenient tool for foreign currency brokers, as it allowed them to bypass local legislation and avoid exchange rate fluctuations, particularly in developing countries. But its lack of oversight also attracted organized criminal elements, prosecutors said.

“Payment in digital currencies makes it easier for traffickers to launder funds that no longer need to be placed into the traditional financial system. Payment can be immediately forwarded to an international digital currency account, perhaps in payment to the original source of supply, or further layered through multiple digital currency accounts and exchangers until reintegrated into the legitimate economy,” the National Drug Intelligence Center stated.

To open a Liberty Reserve account, users needed only to submit a name, address, email address, date of birth and occupation.

Budovsky’s arrest and the closing of the Liberty Reserve website prompted a wave of online chatter from affected clients. Forex Magnates, which describes itself as a “specialized forex news and research source,” called Liberty Reserve “the leading payment channel for traders in emerging and frontier markets.”

Citing a broker and analyst in Pakistan, Forex Magnates said, “Forex brokers have been benefiting from Liberty Reserve’s vast access as a payment provider, especially in countries where traders face difficulties in transferring funds. Liberty Reserve was a ‘gift’ for several traders, especially after the State Banks’ (State Bank of Pakistan) changes to international money transfers.”

Online reaction has also come from Nigeria, Malaysia and other countries.

An earlier story on www.ticotimes.net about Budovsky’s arrest prompted worried clients to ponder the fate of funds deposited with the company.

“[M]illions of client of Liberty reserve now worried for money around the world , plz give few more info..LR site is down now,” one reader posted on The Tico Times Facebook page.

If they don't come back, I stand a chance to lose about $9,3xx.xx

Don't really remember the exact dollar amount but it's somewhere around those numbers.

i lost 1024$ exactly !

$32xx

1899 i think it will back but wait

I lost 7k , I am scared what will be the future of HYIP INDUSTRY ?

Somewhere in the $1k-2k range.

~ $3300

ca 3k

only 200$.

1xx,xxx

A little over 10k. It hurts. Quite a lot.

around 1k . Very sad

1500$ and in my country it's like 6 month of normal food supply and house rent.

i am not worried of my 10K.. its just i am unable to decide which e-currency i should use next..

~ $2000, but could of been worse... so can't complain to much

a few hundreds $

$800 - but I still think it will come back... blind hope

I lost 424 exactly and my friend lost between 12 to 10k.

90$

around $140

Zilch!!! I stopped dealing with them a long time ago.

Other collapsed exchangers thread, Talkgold HYIP ponzi forum

about 16k
that was all my money and now i am empty!

more than 12,000 $ and so sad

$3300 to be precise

around 2,500 lsh i don't like keeping large amounts online

i lost 4k $$

i lost 30k

i lost $5xx dollars

i lost below 1k but one of the biggest exchanger xxxx in my country indonesia lost 175ksusd another lost above 100kusd, sound crazy yeahh and mostlly mid exchanger lost above 20kusd, retail exchanger above 1k

it because lr is very popular here

indonesian forex trader, big and retailer exchanger doomed, online bussiness doomed

about 5k ,
like if you have a normal car in my country

.................................................. ..........................

Originally Posted by littleroundman

What's going to be interesting over the coming days and weeks is watching how many HYIPs disappear due to their accounts being frozen and how many HYIP owners use the seizures to simply take the money and run.

Many hyip sites will fail and disappear but scammers will find a New DGC to replace LR with similar conditions (anonymous and non-refundable) to run their scam schemes.

Wow, Krebs on Security just reported that Liberty Reserve IS NOT THE ONLY ONE. FIVE OTHER cyberexchanges ALSO WENT OFFLINE at about the same time.

Reports: Liberty Reserve Founder Arrested, Site Shuttered — Krebs on Security

Someone posted this video allegedly from Puerto Rico news Channel 7

https://www.youtube.com/watch?v=UH1ryOM-iyk

In past couple of days i saw a lot of people on internet in denial of every small detail about these news articles.
The most ridiculous of them was claim that Arthur Budovsky has nothing to do with Liberty Reserve.
Well they can deny as much as they want, if they were paying attention to HYIP world for long time and understood a thing or two about offshores,
they would know that formation agent (Allan Garcia) of the Costa Rica companies in fact has noting or little to do with Liberty Reserve.

Ok, here is more proof for those that Arthur is in fact behind LR

Whois on LR site on Nov 2005:

LR_WHOIS_2005m.jpg



Archived 2006 LR snapshot of contact page with Arthur's NY cell phone number:

LR_ARCHIVE_2006m.jpg
URL: Contact Us



Excerpt from LR Interview in 2002:

LR_INTERVIEW_2003.jpg
URL: p l a n e t g o l d

Archived GoldAge 2005 Contact Page:

GA_ARCHIVE_2005.jpg
URL:e-gold


NY DA 2006 Press release:
GA_DA_PR_ARCHIVE_2006.jpg
URL: DANY | What's New | July 27, 2006

Originally Posted by Fgold

Many hyip sites will fail and disappear but scammers will find a New DGC to replace LR with similar conditions (anonymous and non-refundable) to run their scam schemes.

Yes, but it'll be based on parts unknown with unknown laws and that uncertainty may be enough to hold back some of the potential victims.

There's sure a lot of hate when VentureBeat published an article on this. :) Read some of the comments. :D

Digital currency biz Liberty Reserve shut down, founder arrested | VentureBeat

The denial (and anger) on MMG is pretty hilarious.
"Its a DDoS attack"
"A Facebook friend says they'll be back on Tuesday / next week / soon"

Dream on.... your money is gone. When is it Payza's turn, and STP?

Originally Posted by kschang

There's sure a lot of hate when VentureBeat published an article on this. :) Read some of the comments. :D

Digital currency biz Liberty Reserve shut down, founder arrested | VentureBeat

It would appear that a number of the 'angry' people are from countries/states known for their scams. Makes you wonder how many claiming innocence, are.