Internet Payment Processor Liberty Reserve Accused of Laundering $6 Billion

pdclarry writes with a followup to this weekend's story that Liberty Reserve, a huge international payment processor, had been shut down and its founder had been arrested. "Liberty Reserve, apparently the Internet bank of choice for criminals, as reported by the NY Times, Wired and Business Week, has been accused of laundering over $6 billion dollars. Incorporated in Costa Rica in 2006, Liberty Reserve allegedly 'facilitated global criminal conduct' and was created and structured 'as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,' Manhattan U.S. Attorney Preet Bharara said in an indictment (PDF) unsealed today. Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant."

How is this news?

[haruchai]

There's a financial agency that's not a money-laundering operation? We live in interesting times.

Re:as opposed to the 300 trillion

[Anonymous Coward]

I believe its called 'too big to fail'
Also known as 'the people in power keep their money there'

Also known as a bunch of douchebagels who manipulate the market and come whining to the government for handouts when someone calls them out.

Re:as opposed to the 300 trillion

[Anonymous Coward]

Or the $420 billion laundered by Wachovia [wikipedia.org], for which they paid a $160 million fine.

This is almost certainly less than the profit they made - international money transfers are not cheap - and nobody was prosecuted.

It really is one law for the rich...

Re:as opposed to the 300 trillion

[anagama]

Good on Judge Gleason! I'm glad to hear that he may torpedo that travesty of a deal. Still, Obama's legal team is working hard to protect the banksters:

The deal -- known as a deferred prosecution agreement (DPA) -- meant HSBC was exempt from prosecution and triggered a storm of criticism. Judge John Gleeson is now believed to be considering rejecting the deal, a move that could leave HSBC facing a criminal prosecution and the threat that its charter to do business in the US could be revoked. ... The justice department is believed to be challenging the need for Gleeson's approval after failing to get a quick signature while the judge is upholding his opinion that he must sign off on the DPA.

Re:Attack on digital currency

[rmstar]

The "powers that be" running the world's major banks in concert, can't have any currency run outside of their control and manipulation, because then they would lose their grip on the world's economies (and in turn, their people) to do their bidding.

I'm here to say that I am fine with this.

Governments are needed to bring order and stability, and they do that by enforcing the rule of law, including the legality of business. Money laundring undermines this, so it must be prosecuted. Actually, I am quite happy that they are finally doing somthing about money laundring.

That goverments don't get all what they do 100% right is normal for any human endeavour, and a reason to engage into politics, not to pretend we will be better off without governments.

Anyway, bitcoins & co need to be regulated to avoid it becomming a vehicle for illegal business.