On behalf of Law Offices of Dan C. Guthrie, Jr. on Monday, March 17, 2014.
Liberty Reserve, a company that operated one of the world’s most widely used digital currency services, and seven of its principals and employees have been indicted for money laundering and operating an unlicensed money transmitting business. Liberty Reserve is alleged to have had more than one million users worldwide with more than 200,000 users in the U.S. who transacted more than $6 billion in alleged proceeds of crimes.
Arthur Budovsky, the principal founder of Liberty Reserve was arrested in Spain;Vladimir Kats, the co-founder of Liberty Reserve, was arrested in Brooklyn, New York; Azzeddine el Amine, a manager of Liberty Reserve’s financial accounts, was arrested in Spain; and Mark Marmilev and Maxim Chukharev, who helped design and maintain Liberty Reserve’s technological infrastructure were arrested in Brooklyn, New York, and Costa Rica, respectively. Two other defendants, Ahmed Yassine Abdelghani (“Yassine”) and Allan Esteban Hidalgo Jimenez (“Hidalgo”), are at large in Costa Rica.
In addition to the criminal charges brought in the Indictment, five domain names were seized, namely, the domain name of Liberty Reserve and the domain names of four exchanger websites that were controlled by one or more of the defendants; 45 bank accounts were restrained or seized; and a civil action was filed against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were allegedly used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering. The investigation involved law enforcement action in 17 countries, including Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada, and the U.S.
If convicted the individuals will face life in prison without parole under the Federal Sentencing Guidelines.
(Guthrie’s note: The government has become increasingly aggressive in seizing and freezing assets of defendants prior to trial frequently based only on the affidavit of a federal agent. Typically, these cases are complex and require significant financial resources to defend, especially if they involve international transactions like the ones alleged here. Unless a defendant has other untainted funds to retain counsel and the forensic experts needed for the defense of a case like this, he can find himself embroiled in a bitter court battle to get access to his own money to defend himself. )