Judicial investigators said Tuesday that they have been working since 2011 on the Liberty Reserve case.
The Judicial Investigating Organization said that it worked in conjunction with the U.S. Internal Revenue Service and the Oficina de Investigación en Seguridad de Inmigración y Control de Aduanas here. This is the investigation that resulted in the arrest of Arthur Budovsky in Spain last week. Agents disclosed Tuesday that they also detained Maxim Chukharev, 27, here. He was involved in the technical and computer aspects of the firm.
In all seven persons were detained.
The U.S. Attorney’s Office in Manhattan said that Liberty Reserve was a $6 billion money laundering scheme with at least a million users worldwide. It said the majority of users were criminals because they could hide their identity and still use the electronic currency transfer system.
Budovsky, identified here as an economist by profession, tried to get the firm approved by the Superintendencia General de Entidades Financieras here. When that effort was rejected in 2011, he dispersed the operation into other companies and even other countries. He maintained the Liberty Reserve Web site until Thursday even though he claimed that the firm had been shut down two years earlier, according to investigators.
To show how anonymous dealing with Liberty Reserve was, the U.S. Attorney’s office said that as part of the investigation, a law enforcement agent opened and executed transactions through an undercover account at Liberty Reserve in the name of “Joe Bogus” and the address “123 Fake Main Street” in “Completely Made Up City, New York.”
Budovsky’s partner Vladimir Kats, 41, was detained in Brooklyn, New York. Both had been grabbed in New York for a similar operation, called Gold Age, in 2006. That was the same year U.S. investigators said that the pair incorporated Liberty Reserve here. Both were convicted and given probation.
Investigators had been tapping the telephones of principals. According to U.S. investigators, Kats was overheard telling an associate that Liberty Reserve is money laundering operation that hackers use.
Although U.S. investigators linked the firm to hackers, fraudsters, swindlers, and even kiddie porn purveyors, the firm also received heavy use from foreign exchange speculators.
The chance of getting any money returned seems slim with the company’s computer servers dismantled and in storage with the Poder Judicial. They were confiscated Thursday with raids in Santa Ana and Heredia.
Meanwhile, agents in Costa Rica still are seeking two persons named in the Liberty Reserve indictment. They are Ahmed Yassine Abdelghani, 42, and Allan Esteban Hidalgo Jimenez, 28,
Unlike some previous law enforcement raids that shut down popular financial operations in Costa Rica, the current case is unlikely to have much impact here because most of the firm’s customers are elsewhere.