Costa Rican officials are abuzz with concerns about money laundering now that the case of Liberty Reserve has become public.
But some officials were well aware of the suspicious operation of the company. Among these is the Instituto Costarricense sobre Drogas, which said it had received suspicious transaction reports from banking entities.
Such reports are made when a banking entity does not believe that the origin of the funds is adequately explained.
Liberty Reserve created its own form of currency known as the L.R., and certainly that point will be argued in U.S. courts against a money laundering allegation. But the exchanging of money took place at third party companies that converted national currencies into the L.R.s. The operators of Liberty Reserve, including Arthur Budovsky, who was arrested last week in Spain, also operated some of these exchange firms.
The Instituto Costarricense sobre Drogas, said it turned over accounts of the suspicions to the prosecutors in Costa Rica. They were believed to be working at that time with U.S. law enforcement and investigators from other nations which is why there was no immediate action here.
Liberty Reserve also applied for and was rejected by the Superintendencia de Entidades Financieras here. The operators pretended to go out of business to avert suspicion.
U.S. officials have termed Liberty Reserve the largest money laundering operation ever broken up. They said the firm handled billions of dollars, much of it of criminal origin.
Judicial agents said that they raided and searched these firms as part of the investigation a week ago: Empresa Silverhand Solutions & Technology S.A. in Santa Ana; Empresa Web S.A. in Escazú; and Grupo Lulu, also in Escazú. Also searched was a firm identified as Grupo Tritón and a firm that rented Internet servers.
In addition three homes were searched, including that of Budovsky and one occupied by Maxim Chukharev, another principal in the firm who was taken into custody there. He lives in Santa Ana.
As the case unfolds, there is more support for a proposal in the legislature to allow the extradition of Costa Rican nationals. That is forbidden by the Costa Rican Constitution regardless of the crime alleged.
However, law enforcement officials and U.S. officials support a measure that would lead to the extradition of persons involved in organized crime activities. A number of Costa Ricans who live here are wanted in other jurisdictions and cannot be extradited.
If the measure wins approval in the described form, criminals engaged in joint activity would be eligible for extradition even if they were Costa Rican. But a murderer who acted alone would-be protected.