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Author Topic: Costa Rican (Liberty Reserve) arrested in Spain for alleged financial crimes  (Read 3562 times)
Coinbuck @ BTCLot
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May 25, 2013, 12:51:59 PM
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Arthur Budovsky Belanchuk, 39, on Friday was arrested in Spain as part of a money laundering investigation performed jointly by police agencies in the United States and Costa Rica.

Costa Rican prosecutor José Pablo González said Budovsky, a Costa Rican citizen of Ukrainian origin, has been under investigation since 2011 for money laundering using a company he created in the country called Liberty Reserve.

Local investigations began after a request from a prosecutor’s office in New York. On Friday, San José prosecutors conducted raids in Budovsky's house and offices in Escazá, Santa Ana, southwest of San José, and in the province of Heredia, north of the capital.

Budovsky's businesses in Costa Rica apparently were financed by using money from child pornography websites and drug trafficking.

New York conviction

According to records from the U.S. Justice Department, on July 27, 2006, Budovsky and a partner identified as Vladimir Kats were indicted by the state of New York on charges of operating an illegal financial business, GoldAge Inc., from their Brooklyn apartments.

They had transmitted at least $30 million to digital currency accounts worldwide since beginning operations in 2002.

The digital currency exchange, GoldAge, received and transmitted $4 million between Jan. 1, 2006, and June 30, 2006, as part of the money laundering scheme.

Customers opened online GoldAge accounts with limited documentation of identity, then GoldAge purchased digital gold currency through those accounts; the defendants' fees sometimes exceeded $100,000.

Customers could choose their method of payment to GoldAge: wire remittances, cash deposits, postal money orders or checks.

Finally, the customers could withdraw the money by requesting wire transfers to accounts anywhere in the world or by having checks sent to any identified individual.

Budovsky and Kats were sentenced to five years in prison for engaging in the business of transmitting money without a license, a felony violation of state banking law, but got probation.

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Liberty Reserve's web site is currently not working. Their domain names are not resolving. The blog site where they post maintenance news is also not working. Further digging shows us that their nameservers now points to ns1.sinkhole.shadowserver.org and ns2.sinkhole.shadowserver.org. They say that this nameservers are used for domains that are seized by the US governnment.

We searched further and we found this article. The article says

    Arthur Budovsky Belanchuk, 39, on Friday was arrested in Spain as part of a money laundering investigation performed jointly by police agencies in the United States and Costa Rica.

    Costa Rican prosecutor Jose Pablo Gonzalez said Budovsky, a Costa Rican citizen of Ukrainian origin, has been under investigation since 2011 for money laundering using a company he created in the country called Liberty Reserve.

As of now we are not sure if Liberty Reserve is still going to return or not. Let's just hope for the best.

http://www.pdproxy.com/blog/liberty-reserve-is-down-owner-arrested-43.htm?ref=facebook.com
http://www.ticotimes.net/More-news/News-Briefs/Costa-Rican-arrested-in-Spain-for-alleged-financial-crimes_Friday-May-24-2013

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May 25, 2013, 03:12:11 PM
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Do you guys realise how much dirty money was passing through their service? They were known for their off-shore old and reputable service, with no chargebacks.. liberty reserve was the nº1 currency for dark bussiness

-malware money
-fraud money
-hacks sales
-etc

anyone who knows a little about this bussiness knows that liberty reserve was accepted by anyone doing those..

now bitcoin will get its place

Get ready for the shitstorm

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May 25, 2013, 03:58:04 PM
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Do you guys realise how much dirty money was passing through their service? They were known for their off-shore old and reputable service, with no chargebacks.. liberty reserve was the nº1 currency for dark bussiness

-malware money
-fraud money
-hacks sales
-etc

anyone who knows a little about this bussiness knows that liberty reserve was accepted by anyone doing those..

now bitcoin will get its place

Get ready for the shitstorm


The way I see it these people still need Bitcoin, and if it's more difficult to get for them price will go UP.
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May 25, 2013, 04:05:01 PM
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Parallel discussion going on here in the legal forum: https://bitcointalk.org/index.php?topic=215967.0

Marco Santori is a lawyer, but not your lawyer, and this is not legal advice.  If you do have specific questions, though, please don't hesitate to PM me.  We've learned this forum isn't 100% secure, so you might prefer to email me.  Maybe I can help!  Depending upon your jurisdiction, this post might be construed as attorney advertising, so: attorney advertising Smiley
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May 25, 2013, 04:32:18 PM
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The end of that other link you pointed to links back to here.

So I just went through the process of setting up a webmoney account. Was going to use it to transmit LR to MtGox.

Didn't get around to doing any transfers, now I see that option is not available at MtGox, and this forum explains why.

So I guess the only route left to me is Bitcoin transfer, or Bank Transfer with the hefty fees. Fun times. I see the fee is 0.6% for each trade. How does this compare with other exchanges?

The stock market today is a war zone, where algobots fight each other over pennies, millions of times a second.
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May 26, 2013, 07:37:51 PM
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The end of that other link you pointed to links back to here.

So I just went through the process of setting up a webmoney account. Was going to use it to transmit LR to MtGox.

Didn't get around to doing any transfers, now I see that option is not available at MtGox, and this forum explains why.

So I guess the only route left to me is Bitcoin transfer, or Bank Transfer with the hefty fees. Fun times. I see the fee is 0.6% for each trade. How does this compare with other exchanges?

As exchange options decrease for U.S. citizens you will see ever increasing fees associated with exchange to fiat. I hope miners are including that in with their profitability calculations. It's more now than just paying the electric bill and the hardware. From now on you will pay a hefty price to exchange enough to pay the electric bill. MtGox needs to leave Japan right now to avoid being caught up in the shitstorm that will happen when the Japanese government is solicited to assist the U.S. justice system. 

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May 30, 2013, 07:55:12 AM
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Yes, it does appear that way.

But what about all the other businesses dealing in 'electronic' currencies. All the prior game companies that had their own currencies.

Take a look at this old mmorpg entropia. This company allowed people to play for free. But you could buy into the game with real dollars to get thier currency. But the big thing about them vs others was you could also go the other way. Take their gaming currency and convert it back to cash. Was a lengthy wait to get it out, to avoid fraud, but it worked. The had digital assets of one account over USD25K I believe.

See this wikipedia list of events in the game.
"December 14, 2004 - Game creators MindArk announced the conclusion of the first "Treasure Island Sale", a virtual island put up for auction. The winning bidder, Zachurm "Deathifier" Emegen, paid 265,000 PED (US$26,500) for the island."

So if they are going to close down exchanges, what about games doing similar things.


The stock market today is a war zone, where algobots fight each other over pennies, millions of times a second.
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May 30, 2013, 08:16:19 AM
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Yes, it does appear that way.

But what about all the other businesses dealing in 'electronic' currencies. All the prior game companies that had their own currencies.

Take a look at this old mmorpg entropia. This company allowed people to play for free. But you could buy into the game with real dollars to get thier currency. But the big thing about them vs others was you could also go the other way. Take their gaming currency and convert it back to cash. Was a lengthy wait to get it out, to avoid fraud, but it worked. The had digital assets of one account over USD25K I believe.

See this wikipedia list of events in the game.
"December 14, 2004 - Game creators MindArk announced the conclusion of the first "Treasure Island Sale", a virtual island put up for auction. The winning bidder, Zachurm "Deathifier" Emegen, paid 265,000 PED (US$26,500) for the island."

So if they are going to close down exchanges, what about games doing similar things.



It's hard to say exactly what they will do. I think Bitcoin will get a different reaction than gaming credits will because it can be used for worldwide money laundering. Silk Road will also attract more attention because it is obviously using Bitcoin to hide criminal proceeds.

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