Liberty Reserve mastermind pleads guilty to money laundering
Liberty Reserve had grown into a multimillion dollar money laundering enterprise before feds shut it down in 2013. Now its founder has pleaded guilty to charges in federal court.
Arthur Budovsky, founder of the virtual currency Liberty Reserve, pleaded guilty to running a money-laundering operation from 2006 to 2013 that ultimately had five million accounts worldwide and moved more than $250 million gotten by criminals through identity theft, credit card fraud, computer hacking and other illicit activities.
The 42-year-old Budovsky created the enterprise specifically to facilitate “anonymous and untraceable illegal transactions and launder the proceeds” of crimes, according to a release from the Federal Bureau of Investigation (FBI). He renounced his U.S. citizenship in 2011 to live in Costa Rica in an effort to escape the reach of U.S. law enforcement, but the feds shut down Liberty Reserve in 2013 and Budovsky was sent packing to the U.S. to face charges.
“After a prior conviction for operating an unlicensed money transmitting business, Budovsky developed Liberty Reserve, which quickly became a premier service used by criminals around the world to launder their criminal proceeds,” Assistant Attorney General Leslie R. Caldwell said in the release, noting that it was through a global effort that the enterprise was shut down and its mastermind was returned to the U.S.
Seventeen companies cooperated in the probe of the cyber-banking scheme, according to U.S. Attorney Preet Bharara.
Budovsky lodged a guilty plea in U.S. District Court in the Southern District of New York to one count of conspiring to commit money laundering. Budovsky will be sentenced on May 6. Four of his co-defendants in the case already have pleaded guilty—two were sentenced to five- and three -year prison terms and two still await sentencing. Two others involved in the scheme remain fugitives.