One of the World’s Largest Digital Currency Companies and Seven of Its Principals and Employees Charged in Manhattan Federal Court with Running Alleged $6 Billion Money Laundering Scheme

Liberty Reserve Allegedly Processed at Least 55 Million Illegal Transactions for at Least One Million Users Worldwide Facilitating Global Criminal Conduct; Investigation and Takedown Believed to Be the Largest International Money Laundering Prosecution in History, Involving Law Enforcement Actions in 17 Countries

Mythili Raman, Acting Assistant Attorney General for the Criminal Division of the U.S. Department of Justice; Preet Bharara, U.S. Attorney for the Southern District of New York; Steven G. Hughes, Special Agent-in-Charge of the New York Office of the U.S. Secret Service; Richard Weber, Chief of the Internal Revenue Service, Criminal Investigation (IRS-CI); and James T. Hayes Jr., Special Agent-in-Charge of the New York Field Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), announced today the unsealing of an indictment charging Liberty Reserve, a company that operated one of the world’s most widely used digital currency services, and seven of its principals and employees with money laundering and operating an unlicensed money transmitting business. Liberty Reserve is alleged to have had more than one million users worldwide, including more than 200,000 users in the U.S., who conducted approximately 55 million transactions – virtually all of which were illegal – and laundered more than $6 billion in suspected proceeds of crimes including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking.

Five defendants were arrested on May 24, 2013, including Arthur Budovsky, the principal founder of Liberty Reserve, who was arrested in Spain; Vladmir Kats, the co-founder of Liberty Reserve, who was arrested in Brooklyn, New York; Azzeddine El Amine, a manager of Liberty Reserve’s financial accounts, who was arrested in Spain; and Mark Marmilev and Maxim Chukharev, who helped design and maintain Liberty Reserve’s technological infrastructure, who were arrested in Brooklyn 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 used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering. The four exchangers whose domain names were seized, as well as the 35 exchangers whose domain names are the subjects of the civil forfeiture action, were all exchangers that transacted business with Liberty Reserve and were listed on Liberty Reserve’s website as “pre-approved exchangers.” The investigation and takedown 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.

In a coordinated action, the U.S. Department of the Treasury and its Financial Crimes Enforcement Network today announced that Liberty Reserve has been named as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. This action includes a notice to the Federal Register proposing to prohibit covered U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for foreign banks that are being used to process transactions involving Liberty Reserve.

Acting Assistant Attorney General Raman said: “As charged, Liberty Reserve operated, on an enormous scale, a digital currency system designed to provide cyber and other criminals with a way to launder their profits without leaving a trace. The company’s very purpose was to launder its users’ criminal proceeds through the U.S. and global financial system. By indicting Liberty Reserve and its principals, restraining over $25 million in criminal proceeds, forfeiting domain names, and seizing servers in countries around the globe, our message is clear: money launderers can run, but they can’t hide from the U.S. justice system. Combating the threat of global illicit finance requires using every tool we have at our disposal, and today we demonstrate our resolve to ensure that criminals who exploit the U.S. and global financial system will be held to account.”

U.S. Attorney Bharara said: “ As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes – the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers. The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit Internet banking. As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

Secret Service Special Agent-in-Charge Hughes said: “These arrests are an example of the Secret Service’s commitment to investigate and apprehend criminals engaged in the misuse of virtual currencies to conduct global monetary fraud. Cyber criminals should be reminded today that they are unable to hide behind the anonymity of the Internet to avoid regulated financial systems. We are grateful to our many law enforcement partners throughout the world for assistance in this investigation, especially in Costa Rica, Spain and the Netherlands.”

IRS-CI Chief Weber said: “We are now entering the cyber age of money laundering. Technology advancements over the past several years have dramatically increased opportunities for criminals to move, conceal and enjoy their ill-gotten gains. Liberty Reserve and its principals have been charged with operating a sophisticated and complex system for structuring financial transactions which catered to those engaged in such criminal activity. What they did not anticipate was our robust partnerships with domestic and foreign law enforcement that allowed us collectively to follow the cyber money trail in the United States and around the world.”

ICE HSI Special Agent-in-Charge Hayes said: “The actions of the U.S. Secret Service, IRS, and HSI in dismantling the Liberty Reserve operation are critical because transnational criminal organizations can succeed only so long as they can funnel their illicit proceeds freely and without detection. HSI is proud of its partnership through the Global Illicit Financial Team and will continue to aggressively target financial institutions that deliberately enable businesses and individuals to evade global financial systems in furtherance of criminal schemes.”

According to the allegations in the indictment, the civil forfeiture complaint, and other documents filed in federal court:

Background

Liberty Reserve was incorporated in Costa Rica in 2006 and operated the digital currency commonly referred to as “LR.” While the company billed itself as the Internet’s “largest payment processor and money transfer system,” serving “millions” of people around the world, including the U.S., at no time did the company register with the U.S. Department of the Treasury as a money transmitting business, as required by law.

Budovsky, the principal founder of Liberty Reserve, directed and supervised its operations, finances, and corporate strategy. Kats, a co-founder, helped operate the company until 2009. The day-to-day operations of Liberty Reserve were managed, at different times, by Hidalgo and Yassine. El Amine managed various financial accounts controlled by Liberty Reserve, while Marmilev and Chukharev were primarily responsible for designing and maintaining the company’s technological infrastructure.

Overview of Liberty Reserve’s Money Laundering Operation

The defendants created, structured and operated Liberty Reserve as a criminal bank-payment processor designed to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. It emerged as one of the principal money transfer agents used by cyber criminals around the world to distribute, store, and launder the proceeds of their illegal activity. The company grew into a financial hub of the cybercrime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking. Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cyber criminals around the world to conduct anonymous and untraceable financial transactions.

The defendants also protected the criminal infrastructure of Liberty Reserve by, among other things, lying to anti-money laundering authorities in Costa Rica and pretending to shut down Liberty Reserve after learning the company was being investigated by U.S. law enforcement. They then continued operating the business through a set of shell companies, and moved tens of millions of dollars through shell company accounts maintained in Cyprus, Russia, China, Hong Kong, Morocco, Spain, Australia and elsewhere.

The Criminal Design of Liberty Reserve

In order to use LR currency, a user first had to open an account through the Liberty Reserve website and provide basic identifying information. Unlike traditional banks or legitimate online processors, Liberty Reserve did not require users to validate their identities. Users routinely established accounts under false names, including such blatantly criminal names as “Russia Hackers” and “Hacker Account.” As part of the investigation, a law enforcement agent opened and executed transactions through an undercover account at Liberty Reserve in the name of “Joe Bogus” and the address “123 Fake Main Street” in “Completely Made Up City, New York.”

Once an account was established, the user could conduct transactions with other Liberty Reserve users. In these transactions, the user could receive transfers of LR from other users’ accounts, and transfer LR from his or her own account to other users, including any “merchants” that accepted LR as payment. Liberty Reserve charged a one-percent fee up to a maximum of $2.99, every time a user transferred LR to another user through the Liberty Reserve system. For an additional “privacy fee” of 75 cents per transaction, a user could hide his or her own Liberty Reserve account number when transferring funds, effectively making the transfer completely untraceable, even within Liberty Reserve’s already opaque system.

To add an additional layer of anonymity, Liberty Reserve did not permit users to fund their accounts by transferring money to the company directly through a credit card transfer or other means. Users also could not withdraw funds from their accounts directly. Instead, Liberty Reserve users were required to make any deposits or withdrawals through the use of third-party “exchangers,” which enabled the company to avoid collecting any information about its users through banking transactions or other activity that would leave a centralized financial paper trail. Budovsky, Kats and El Amine owned and operated certain Liberty Reserve exchanger services.

The Liberty Reserve website recommended a number of “pre-approved” exchangers, which tended to be unlicensed money transmitting businesses operating in countries without significant governmental money laundering oversight or regulation, such as in Malaysia, Russia, Nigeria, and Vietnam. The exchangers charged transaction fees for their services that were much higher than the fees charged by mainstream banks or payment processors for comparable money transfers.

The Criminal Use of Liberty Reserve

To further enable the use of Liberty Reserve for criminal activity, its website offered a “shopping cart interface” that “merchant” websites could use to accept LR currency as a form of payment. The “merchants” who accepted LR currency were overwhelmingly criminal in nature. They included traffickers of stolen credit card data and personal identity information, peddlers of various types of online Ponzi and get-rich-quick schemes, computer hackers for hire, unregulated gambling enterprises, and underground drug-dealing websites.

In addition to being used to process payments for illegal goods and services online, Liberty Reserve was also used by cyber criminals to launder criminal proceeds and transfer funds among criminal associates. For example, Liberty Reserve was used by credit-card theft and computer-hacking rings operating in countries around the world, including Vietnam, Nigeria, Hong Kong, China, and the U.S., to distribute proceeds of these conspiracies among the members involved.

The defendants were well aware that Liberty Reserve functioned as an unlawful money-laundering enterprise. In an online chat between Kats and Yassine that was captured by law enforcement, Kats explicitly described Liberty Reserve’s activities as “illegal” and noted that “everyone in USA” such as “DOJ” knows “LR is [a] money laundering operation that hackers use.”

* * *

Liberty Reserve, Budovsky, 39, a citizen of Costa Rica who resides in the Netherlands, Kats, 41, of Brooklyn, New York, Yassine, 42, of Costa Rica, Hidalgo, 28, of Costa Rica, El Amine, 46, of Costa Rica, Marmilev, 33, of Brooklyn, New York, and Chukharev, 27, of Costa Rica, are each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison, one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum term of five years in prison, and operation of an unlicensed money transmitting business, which carries a maximum term of five years in prison. The terms of incarceration apply to the individual defendants.

This case was investigated by the Secret Service, the IRS-CI and ICE HSI, which worked together in this case as part of the Global Illicit Financial Team. The Secret Service’s New York Electronic Crimes Task Force assisted with the investigation, as well as the Judicial Investigation Organization in Costa Rica, 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. The Shadowserver Foundation acted as the hosting provider for the domain names that were seized pursuant to the Court-authorized seizure warrants. The Department of Justice’s Office of International Affairs and Computer Crime and Intellectual Property Section also provided support.

This case is being prosecuted jointly with the Department of Justice’s Asset Forfeiture and Money Laundering Section, which is overseen by Acting Assistant Attorney General Mythili Raman; and the U.S. Attorney’s Office for the Southern District of New York’s Complex Frauds Unit and Asset Forfeiture Unit.

If you believe you were a victim of a crime and were defrauded of funds through the use of Liberty Reserve, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact (888) 238-0696 or (212) 637-1583.

The charges contained in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

Chinese hackers ‘compromise’ US weapons systems designs Black Hawk helicopters were cited as one of the weapons systems compromised by hackers Chinese hackers have accessed designs for more than two dozen US weapons systems, a US newspaper has reported.

Designs for combat aircraft, ships and missile defences were among those compromised, a Pentagon paper found, the Washington Post reported.

A public version of the same Defense Science Board report said in January that the US was unprepared for a full-scale cyber attack.

The board did not return requests for comment from the BBC.

The Washington Post report comes as Australia discloses Chinese hackers stole floor plans for the new headquarters of its domestic intelligence agency.

The compromised US designs include those for advanced Patriot missile systems called PAC-3, an Army anti-missile system known as Thaad, and the Navy’s Aegis ballistic-missile defence system, according to the Washington Post.

The F/A-18 fighter jet, V-22 Osprey aircraft, Black Hawk helicopter and the Navy’s new Littoral Combat Ship were also compromised.

The F-35 Joint Strike Fighter, the most expensive weapons system ever built, was also cited on the list.

The reports do not describe the extent of the theft, but correspondents say the hack could give China information that may be used against the US in the event of a potential future conflict.

Here is a pic of LOVERGIRL NICKY…. You CAN’T miss her!! She’s the big ugly b*h just like her rotten ass cousin kedesha . LOVERGIRL NICKY you’re a dumb b*h. Go down in a tub of bleach and wash that stinking a** twat. You can only get a african man cause they’re the only ones who can tolerate the smell in between your legs and mouth. When your fat a** wear shorts, the insides of your BLACK a* thigh show from rubbing together. You AND your WHOLE crew are w*!! Fi Fi too so go sit down and shut up B*H and stop borrowing my sister’s clothes. You try a defend your rotten a** cousin kedesha aka kedese but can’t defend yourself!!! We haven’t forgotten what you’ve done and all the crap you talk in the DMV!!

Press Release

DEA NEWS: Former Guatemalan President

Extradited to the U.S. to Face Money Laundering Charges

DEA Administrator Michele M. Leonhart and other federal officials today announced the extradition of ALFONSO PORTILLO, the former President of Guatemala, who is charged with conspiring to launder millions of dollars he embezzled from the Government of Guatemala through bank accounts located in the United States. Portillo arrived in the Southern District of New York last Friday and will be presented today before U.S. District Judge Robert P. Patterson.

Joining Administrator Leonhart in making the announcement were Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”).

DEA Administrator Michele M. Leonhart said: “Former President Portillo has been extradited to the United States for violations of money laundering. In his role as President, Mr. Portillo used our banking system to launder illegal proceeds, which is a violation of law that DEA will always aggressively investigate. Thanks to the work of many in law enforcement and DEA’s strong and cooperative relationships with the Guatemalan government, Mr. Portillo will now face justice in a U.S. courtroom.”

United States Attorney Preet Bharara said: “After three years of fighting his extradition, Alfonso Portillo has finally arrived in the United States to answer for his alleged misappropriation of millions of dollars intended for the benefit of the people of Guatemala and which he laundered through United States banks. Our ability to hold him to account for his alleged criminality and corruption is the result of the unrelenting commitment and dedication of our prosecutors and our law enforcement partners in both the United States and Guatemala.”

IRS-CI Special Agent-in-Charge Toni Weirauch said: “IRS-Criminal Investigation is dedicated to working with our law enforcement partners and sharing our financial investigative expertise to combat and disrupt criminal organizations and individuals that commit crimes against our society and the world economy, including international money laundering. To that end, we are a proud participant in the DEA’s New York Organized Crime Drug Enforcement Strike Force. These money laundering allegations are truly international in nature, as the American financial system was misused and harmed in the concealment of money embezzled from the government of Guatemala and ultimately, its people.”

According to the Indictment previously unsealed in Manhattan federal court:

PORTILLO served as the President of Guatemala from January 14, 2000, to January 14, 2004. In that capacity, he embezzled tens of millions of dollars in public funds, a substantial portion of which he laundered through American and European bank accounts.

PORTILLO misappropriated public money in at least three different ways:

First, in 2000 and 2002, PORTILLO embezzled approximately $2.5 million dollars provided by the Government of Taiwan’s Embassy in Guatemala. In 2000, the Taiwanese Embassy issued three checks totaling $1.5 million, drawn upon a New York bank account created for the purpose of funding a Guatemalan program designed to purchase books for school libraries, Bibliotecas Para La Paz (“Libraries for Peace”. PORTILLO endorsed these checks and caused them to be deposited in a bank account in Miami, Florida. None of the money from the Government of Taiwan was applied towards the Libraries for Peace program; almost $1 million of the donation was ultimately diverted, through a series of transactions and transfers intended to conceal the source and origin of the funds, to bank accounts in the name of PORTILLO’s former wife and daughter at Banco Bilbao Vizcaya Argentaria (“BBVA” in Paris, France. The money transferred into the BBVA Accounts was further laundered through financial institutions in Luxembourg and Switzerland, among other places.

Second, in 2001, PORTILLO embezzled approximately 30 million Quetzales (equivalent at that time to approximately $3.9 million) from the Guatemalan Ministry of Defense. PORTILLO arranged for this money to be delivered to one of Guatemala’s national banks, Credito Hipocaterio Nacional (“CHN”, to which PORTILLO had previously appointed a co-conspirator (“CC-1” as the bank’s president. With the assistance of CC-1, PORTILLO directed the disbursement of the military funds to, among other things, finance a private land deal, disguise a loan to an associate, and issue checks to a company controlled by another co-conspirator. That co-conspirator then transferred a portion of that money to the BBVA accounts controlled by PORTILLO’s former wife and daughter through a Miami bank account.

Finally, from approximately 2000 through 2003, PORTILLO misappropriated funds from the publicly financed reserves of CHN. PORTILLO and his co-conspirators created overdrafts in CHN accounts belonging to companies established by CC-1 and other co-conspirators. Through the use of these overdrafts, PORTILLO and his co-conspirators withdrew and transferred money from CHN accounts in excess of the accounts’ otherwise existing balances. PORTILLO used these overdraft withdrawals and transfers to purchase, among other things, various personal items –- including expensive watches and cars –- for himself and his associates. On other occasions, PORTILLO and his co-conspirators used the overdrafts on CHN accounts to transfer and launder funds into business and personal accounts, maintained in the United States and elsewhere, belonging to co-conspirators. Relying on the CHN overdrafts, PORTILLO also 3

transferred money to help prop up two failing banks that were principally owned by a close associate and political supporter of PORTILLO’s, Banco Promotor and Banco Metropolitano.

* * *

If convicted of the money laundering conspiracy count with which he is charged, PORTILLO, 61, faces a maximum term of 20 years in prison and a maximum fine of the greater of $500,000, or twice the value of the monetary instruments or funds involved in the money laundering transactions.

Mr. Bharara specifically thanked the DEA’s New York Organized Crime Drug Enforcement Strike Force – which is comprised of agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement’s Homeland Security Investigations, the New York State Police, IRS-CI, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service and the U.S. Marshals Service – the Department of State, and the U.S. Department of Justice’s Office of International Affairs for their work in this investigation. Mr. Bharara also recognized and thanked the United Nations Commission Against Impunity in Guatemala (“CICIG”, the Guatemalan Special Prosecutor’s Office for the CICIG, and the Ministerio Público in Guatemala for their assistance in this investigation.

Today, May 27,2013 marks Clifford ”Mr Vegas” Smith’s third attempt to bring his child custody case ivolving his ex-girlfriend Shellian McBayne to court. McBayne obviously fearless of the law did not show up to the scheduled court appointment today. The judge has adjourned the case until September 17,2013.

PEOPLE IS NOT ME WRITE THE BELOW..BECAUSE MI NUH KNOW HOW DEM LOVE MY INBOX SUH AND MI NUH BUSINESS AT ALL

Miss Kitty the Fluffy Diva leaves the Link Up Radio Morning Show. Ms Kitty joined the Link Up Radio team in March, after celebrity Broadcaster Raggashanti resigned from the hot seat after a fall out with David Squeeze Annakie. Miss Kitty who was also booted from RJR recently, has now been placed in a 8pm to 12midnigh slot on Link Up Radio. Reliable sources have told us that Ms Kitty was taken off the morning show because she did not connect with the Tri-state audience and because her show was not bringing in any revenue for Biolife, the company that has been dogged as a scam in the New York Caribbean community and whose sales has dropped significantly since the latest scandal between Squeeze and Raggashanti. Many believe that it will only be a matter of time before Miss Kitty is permanently off Link Up Radio, similar to many others who came before her that left