Liberty Reserve founder sentenced to 20 years in prison
In what I believe is the first case of a payment processor founder being criminally charged since I started BehindMLM, Arthur Budovsky Belanchuk, founder of Liberty Reserve, has been sentenced to 20 years in prison.
The DOJ shut down Liberty Reserve back in mid 2013. Budovski was arrested in Spain, following a joint-operation by US, Costa Rican and Spanish authorities.
A few months later Budovski’s partner in crime, Vladimir Kats, plead guilty to money laundering. A number of Budovski’s co-conspirators have already been handed down prison sentences (Mark Marmilev and Maxim Chukharev).
For many years Liberty Reserve was the darling of the MLM underbelly. Through countless schemes, millions of dollars were scammed from the public at large.
Budovsky was aware that a substantial volume of digital currency transactions were related to Internet investment schemes called high-yield investment programs (“HYIPs”), which he knew to be online Ponzi schemes.
Budovsky was also aware that digital currencies were used by other online criminals, such as credit card traffickers and identity thieves.
Earlier this year in January, Budovski plead guilty to laundering $250 million dollars through the processor. That amount has since been adjusted to as much as $550 million.
Preet Bharara, the United States Attorney for the Southern District of New York, and Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, announced that ARTHUR BUDOVSKY, 42, was sentenced today in Manhattan federal court to 20 years in prison.
Mr. Bharara praised the outstanding work of the United States Secret Service, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which worked together in this case as part of the Global Illicit Financial Team.
Mr. Bharara also thanked the United States Secret Service’s New York Electronic Crimes Task Force for its extraordinary assistance with the investigation.
Additionally, Mr. Bharara specially thanked all the international law enforcement agencies that assisted in the investigation, in particular, the Judicial Investigation Organization in Costa Rica, Interpol, the National High Tech Crime Unit in the Netherlands, the Spanish National Police-Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation, and the Swiss Federal Prosecutor’s Office.
20 years in prison for a few at the top of a worldwide Ponzi payment processor.
Was it worth it?
Do you think this will be a trend or was it just lightning striking once?
Money laundering is not tolerated the world over. China started cracking down when Ezubao ponzi unravelled, and China is VERY serious about economic crimes.
( NOLINK://www.nytimes.com/2016/02/02/business/dealbook/ezubao-china-fraud.html?_r=0 )
Took Russia years to outlaw Mavrodi but now that MMM Global is toast it’ll be a while for him to resurface. Various European schemes have since collapsed (GetEasy, for example). Europol and Interpol have cooperated with US to shut down Profitable Sunrise.
So they haven’t been totally quiet, just… less newsworthy.
Will we see some big Ponzi heads head to prison? Sure hope so.
Too early to tell. We know Payza is under US investigation though…
i wonder if SEC or some lawyer will get money back since back then. liberty reserve has no option on refunds or chargebacks.
I bet Charles Scoville is quaking in his boots right about now 😉