November 4, 2013
How to Launder Billions and Billions of Digital Dollars

Money laundering, that staple of films, both comic and thriller, has changed since the days when gangsters ran local fronts that only dealt in cash. 
A recent Justice Department indictment of the founders of Liberty Reserve, a digital currency company, allows us a rare peek into the mechanics of cleaning criminal lucre. One of those founders, Vladimir Kats, pled guilty on Friday in a New York court.
“Vladimir Kats, by his own admission, helped to create and operate an anonymous digital currency system that provided cybercriminals and others with the means to launder criminal proceeds on an unprecedented scale,” said acting assistant attorney general Mythili Raman.
Liberty Reserve, the DOJ claims, laundered more than $6 billion of dirty money between 2006 and May 2013. They had more than a million clients and processed 55 million financial transactions. The founders were able to skim tens of millions of dollars, prosecutors allege, which were stored in bank accounts all over the world. 
This, then, reveals a new age of cleaning loot: whinging currency across the globe and routing it through the places that have the weakest regulations and regulators. It turns out that, for a few years, money laundering hasn’t been that hard—more like clicking around PayPal than contracting with the Yakuza. 
Read more. [Image: Reuters]

How to Launder Billions and Billions of Digital Dollars

Money laundering, that staple of films, both comic and thriller, has changed since the days when gangsters ran local fronts that only dealt in cash. 

A recent Justice Department indictment of the founders of Liberty Reserve, a digital currency company, allows us a rare peek into the mechanics of cleaning criminal lucre. One of those founders, Vladimir Kats, pled guilty on Friday in a New York court.

Vladimir Kats, by his own admission, helped to create and operate an anonymous digital currency system that provided cybercriminals and others with the means to launder criminal proceeds on an unprecedented scale,” said acting assistant attorney general Mythili Raman.

Liberty Reserve, the DOJ claims, laundered more than $6 billion of dirty money between 2006 and May 2013. They had more than a million clients and processed 55 million financial transactions. The founders were able to skim tens of millions of dollars, prosecutors allege, which were stored in bank accounts all over the world. 

This, then, reveals a new age of cleaning loot: whinging currency across the globe and routing it through the places that have the weakest regulations and regulators. It turns out that, for a few years, money laundering hasn’t been that hardmore like clicking around PayPal than contracting with the Yakuza.

Read more. [Image: Reuters]

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