Liberty Reserve SA, whose operators are charged with running a scheme that masked more than $6 billion of criminal proceeds, was designed to help users evade scrutiny, U.S. prosecutors said.
The digital currency company, unlike traditional banks or legitimate online payment processors, didn’t require users to validate their identity and allowed accounts to be opened under fictitious names, according to prosecutors.
An undercover agent was able to establish a Liberty Reserve account using the alias “Joe Bogus,” listing his address as “123 Fake Main Street,” said Manhattan U.S. Attorney Preet Bharara. He said the prosecution is believed to be the largest money-laundering case brought by the U.S.
Liberty Reserve, incorporated in Costa Rica in 2006, operated as “essentially a black-market bank,” and facilitated global criminal conduct, Bharara said May 28 at a news conference announcing the unsealing of an indictment against the company and seven principals.
The company was shut by the U.S. through criminal and civil enforcement actions. It had helped users launder illegal proceeds of crimes such as identity theft, credit card fraud, computer hacking prosecutors said.
The U.S. charged seven people. Five people tied to the case have been arrested; two remain at large.
The case is U.S. v. Kats, 13-cr-00368, U.S. District Court, Southern District of New York (Manhattan).