Founder of digital money laundering operation Liberty Reserve gets 20 year prison term

Founder of digital money laundering operation Liberty Reserve gets 20 year prison term

The founder of Liberty Reserve - a digital currency outfit used by cybercrooks to launder hundreds of millions of dollars - has been sentenced to 20 years in prison.

Arthur Budovsky was handed the prison term and a $500,000 fine by a US judge after pleading guilty in January to one count of conspiring to commit money laundering.

Incorporated in Costa Rica in 2006, Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system” and allowed people all over the world to send and receive payments using virtual currency.

It is alleged to have laundered more than $8 billion in criminal proceeds over the years. The service had more than five and a half million user accounts from around the world, who made over 78 million transactions through its systems, laundering proceeds from crime including credit card fraud, identity theft, computer hacking, child abuse, and narcotics trafficking.

In an international operation in May 2013, authorities shut down the service and arrested several people, among them principal founder Budovsky.

Four co-defendants, Vladimir Kats, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev, have already pleaded guilty. Marmilev and Chukharev were sentenced to five years and three years in prison, respectively, while the other two are set to hear their fate later this month.

Manhattan US Attorney Bharara says: "Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe.

"Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of US criminal laws."

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