By Emily Flitter
NEW YORK, May 28 (Reuters) – U.S. authorities said on
Tuesday they have shut down a Costa Rica-based money transfer
company that allegedly provided a digital currency widely used
around the world by cyber-criminals.
In a statement, officials said authorities in Spain, Costa
Rica and New York arrested five people on Friday and seized bank
accounts and Internet domains associated with the company,
Liberty Reserve.
The digital currency is a transferable unit that can be
exchanged for cash.
Along with the five arrests, prosecutors filed charges
against two more company employees, who were still at large in
Costa Rica.
According to an indictment filed in U.S. District Court for
the Southern District of New York, “Liberty Reserve has emerged
as one of the principal means by which cyber-criminals around
the world distribute, store and launder the proceeds of their
illegal activity.”
The indictment said the company had more than a million
users worldwide, including at least 200,000 in the United
States, and virtually all of its business was related to
suspected criminal activity.
It processed around 12 million financial transactions per
year. Since it began operating in 2006, the indictment said,
Liberty Reserve laundered around $6 billion in criminal
proceeds.
On Tuesday, the company’s website, http://www.libertyreserve.com,
displayed the message “This domain name has been seized by the
United States Global Illicit Financial Team.”
It was not clear whether the people arrested in Spain and
Costa Rica would be extradited to the United States or when the
two people arrested in Brooklyn, New York, would appear in
court.
A spokeswoman for the U.S. Attorney for the Southern
District of New York declined to comment.
