'$6bn money-laundering website' Liberty Reserve kingpin cuffed

Feds seize 'cyber-crooks' favourite' dot-com, lay charges

Shadowy online money exchange Liberty Reserve has been shut down by the US feds, its dotcom website seized - and its founder arrested. He and six others are accused of running a $6bn global money-laundering operation, the biggest of its kind, according to prosecutors.

In a string of dramatic events,

• On Friday, cops in Costa Rica raided offices linked to the underground payment service, which is alleged to be favoured by cyber-crooks. The police pulled the plug on the Latin America-based website when they grabbed servers during the swoop, effectively freezing all the service's customer accounts.
  
• Meanwhile, the website's founder Arthur Budovsky, 39, was cuffed in Spain. Further arrests were made in Costa Rica and New York.
  
• Then this afternoon, Budovsky and six others were indicted in the US on charges of money laundering, conspiracy to operate an unlicensed money transmitting business and operating an unlicensed money-transmitting business.
  
• And the website's domain name, libertyreserve.com, was seized by the US Global Illicit Financial Team, which has cleared the site and replaced it with a takedown notice and government logos. Before that, the site's DNS records were briefly updated to resolve to Shadowserver.org, a community effort geared to fighting cybercrime.

Liberty Reserve asked for just an email address, a name and a date of birth from its users when they wished to transfer cash electronically: the money was converted into "Liberty Reserve Dollar" or "Liberty Reserve Euro" digital currencies and quickly moved with minimal bureaucracy and transfer fees no higher than $3 a transaction. These features apparently made the service popular with criminals - at least 55 million transactions were carried out - according to US prosecutors who led the investigation into Liberty Reserve.

During a press conference on Saturday, soon after the web money service went dark, Costa Rican state prosecutor Jose Pablo Gonzalez said a number of suspects as well as Budovsky were under investigation over alleged money laundering.

Today's US indictment, issued by the New York's southern district attorney's office, also links Exchangezone.com, Swiftexchanger.com, MoneyCentralMarket.com, AsianaGold.com and EuroGoldCash.com to the Liberty Reserve operation.

The official paperwork claims "the defendants [operated] an international online digital currency service and money transfer system called Liberty Reserve … which was incorporated in Costa Rica in 2006 [and] is extensively used by cybercriminals around the world for distributing, storing and laundering the proceeds of their criminal activity".

The Feds further alleged that Budovsky and his co-conspirators knowingly operated "a criminal business venture" that moved tens of millions of dollars around the world through a network of shell companies - a move to keep the cash beyond the reach of American and European investigators, it is claimed.

Budovsky was indicted in 2006 on similar charges of operating an illegal money business, called GoldAge Inc, from a New York apartment. The Feds alleged that the service transferred $30m during a four-year operation prior to its closure. Budovsky and co-defendant Vladimir Kats were found guilty and sentenced to five years' probation in 2007. However Budovsky failed to see out his punishment and fled to Costa Rica, where he set up Liberty Reserve. He also renounced his US citizenship and became a Costa Rican national.

Today's indictment charges Budovsky, Vladimir Kats, Ahmed Yassine Abdelghani, Allan Esteban Hidalgo Jimenez, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev. The defendants are presumed innocent unless and until proven guilty.

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Two women caught with 140gm heroin in Manipur

IMPHAL: Even as the state government is planning stringent laws to curb the rising trend of drug smuggling in Manipur, police commandos on Saturday evening arrested two women with 140gm heroin worth a few lakh rupees at Pallel town in Thoubal district.

Acting on a tip-off, Thoubal police commandos, along with women cops, waylaid a passenger van heading to Imphal from the border town of Moreh at Pallel along NH-2 and recovered three packets of heroin from their possession.

The two women - Memi Devi (35) and Lubuanliu Panmei (32) - were immediately handed over to the Kakching police for further investigation. During initial interrogation, Memi revealed that the heroin consignment was handed over to them by a Myanmarese woman with the request to hand over the same to her elder sister in Imphal, police said.

On Saturday morning, at Lilong bazaar in the same district, a man was arrested with 4,320 capsules of Spasmo Proxyvon. Taking into account the growing involvement of women in smuggling drugs along the Imphal-Moreh section of the highway, the state government is all set to deploy women police personnel at various check-posts along the stretch.

Besides Saturday's seizure, Pallel town has witnessed two massive hauls of Pseudoephedrine Hydrochloride (PH) content drugs meant for smuggling into Myanmar in less than four months.

On February 24, commandos seized PH drugs worth over Rs 20 crore from six persons, including defence PRO Colonel Ajay Chowdhry, who is now under suspension.

On April 28, similar drugs worth over Rs 3.5 crores were confiscated from the possession of 11 cops including a sub-inspector and a 'jemadar'. In a follow-up action, the officer-in-charge of Moreh police commando was also arrested on Wednesday last.

Last Friday, the state cabinet decided to enact stringent laws to combat the growing trend of drug smuggling in Manipur. PH-content drugs manufactured in India are in high demand at various illegal drug manufacturing units in Southeast Asian countries and the notorious Golden Triangle - the mountainous opium-producing areas of Myanmar, Vietnam, Laos and Thailand - for regenerating them into heroin and other party drugs.

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Heroin worth Rs 1 cr seized in Silchar

Silchar: At least 550 grams of heroin, worth an estimated Rs one crore in the street market, was seized by BSF from two persons in a hotel in Assam's Silchar town on Sunday, official sources said.

On a tip off, BSF personnel recovered the contraband from the two persons staying in a room of the hotel, the sources said.

They were identified as Oinam Singh from Manipur and Saijjudin Laskar from Karimganj district.

The duo allegedly confessed having brought the heroin from Myanmar via Moreh in Manipur to sell the contraband to drug dealers in Silchar, situated along the Indo-Bangladesh border.

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Global criminal ring drains $45 million from ATMs in hours

Thieves make withdrawals after hacking into a database of prepaid debit cards. Seven arrests have been made in the U.S.

Officials say outmoded U.S. card technology may be partly to blame for the theft of $45 million from ATMs. (Gene J. Puskar / Associated Press / January 5, 2013)

A worldwide gang of criminals stole a total of $45 million in a matter of hours by hacking their way into a database of prepaid debit cards and then draining cash machines around the globe, federal prosecutors said.

How were they able to do it? Outmoded U.S. card technology may be partly to blame, the officials said.
Seven people have been arrested in the U.S. in connection with the case, which prosecutors said involved thousands of thefts from ATMs using bogus magnetic swipe cards carrying information from Middle Eastern banks. The fraudsters moved with astounding speed to loot financial institutions around the world, U.S. Atty. Loretta Lynch, who works in New York, said Thursday.
She called it "a massive 21st century bank heist" carried out by brazen thieves in two separate strikes, one in December and the other in February.
One of the suspects was caught on surveillance cameras, his backpack increasingly loaded down with cash, authorities said. Others took photos of themselves with giant wads of bills as they made their way up and down Manhattan.
Here's how it worked:
Hackers got into bank databases, eliminated withdrawal limits on prepaid debit cards and created access codes. Others loaded those data onto any plastic card with a magnetic stripe — an old hotel key card or an expired credit card worked fine as long as they carried the account data and correct access codes.
A network of operatives then fanned out to rapidly withdraw money in multiple cities, authorities said. The cells would take a cut of the money, then launder it through expensive purchases or ship it to the global ringleaders. Lynch didn't say where they were located.
The targets were reserves held by the banks to fund prepaid credit cards, not individual account holders, Lynch said.
She called it a "virtual criminal flash mob," and a security analyst said it was the biggest ATM fraud case she had heard of.
The attack in December reaped $5 million worldwide and the one in February snared about $40 million. The scheme involved attacks on two banks, Rakbank in the United Arab Emirates and the Bank Muscat in Oman, prosecutors said.
The plundered ATMs were in Japan, Russia, Romania, Egypt, Colombia, Britain, Sri Lanka, Canada and several other countries, and law enforcement agencies from more than a dozen nations were involved in the investigation, U.S. prosecutors said.
The accused ringleader in the U.S. cell, Alberto Yusi Lajud-Pena, was reportedly killed in the Dominican Republic late last month, prosecutors said. More investigations continue and other arrests have been made in other countries, but prosecutors did not have details.
An indictment unsealed Thursday accused Lajud-Pena and the other seven New York suspects of withdrawing $2.8 million in cash from hacked accounts in less than a day.
Such ATM fraud schemes are not uncommon, but the $45 million stolen in this one was at least double the amount involved in previously known cases, said Avivah Litan, an analyst who covers security issues for Gartner Inc.
Middle Eastern banks and payment processors are "a bit behind" on security and screening technologies that are supposed to prevent this kind of fraud, but it happens around the world, she said.
"It's a really easy way to turn digits into cash," Litan said.
Some of the fault lies with the ubiquitous magnetic strips on the back of the cards. The rest of the world has largely abandoned cards with magnetic strips in favor of ones with built-in chips that are nearly impossible to copy. But because U.S. banks and merchants have stuck to cards with magnetic strips, they are still accepted around the world.
Lynch would not say who masterminded the attacks globally, who the hackers are or where they were located, citing an ongoing investigation.
The New York suspects were U.S. citizens originally from the Dominican Republic, who lived in the New York suburb of Yonkers and were mostly in their 20s. Lynch said they all knew one another and were recruited together, as were cells in other countries. They were charged with conspiracy and money laundering. If convicted, they face 10 years in prison.
Arrests began in March. Lajud-Pena was found dead with a suitcase full of about $100,000 in cash. The investigation into his death is continuing separately. Dominican officials said they arrested a man in the killing who said it was a botched robbery, and two other suspects were on the lam.
Lynch compared the ring with the $5.8 million in cash stolen from a Lufthansa Airlines vault at Kennedy Airport in 1978, a heist masterminded by Jimmy Burke, the inspiration for Robert De Niro's character in "Goodfellas."

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