Creator of Online Money Gets 20 Years in Prison (cnn.com)

An anonymous reader quotes this report from CNN: Before the virtual currency Bitcoin there was Liberty Reserve -- and its founder just got sentenced to 20 years in prison. Arthur Budovsky, 42, ran an online digital money business out of Costa Rica called Liberty Reserve. The U.S. government contended that the whole thing was just a massive, $6 billion money laundering operation. On Friday, U.S. District Judge Denise L. Cote sentenced him to two decades in federal prison. She said Budovsky did not show "genuine remorse," according to the Department of Justice...

The U.S. government used the Patriot Act to go after this payment processor. The U.S. Treasury Department labeled it a money laundering organization, and cut it off from the American financial system. In 2013, American investigators took over the website and shut it down. In 2014, Budovsky and several coworkers were arrested in Spain. Then Budovsky was extradited to the United States to face trial for money laundering and operating an unlicensed money transmitting business.

Comments

"unlicensed"

[Anonymous Coward]

The fractional reserve cartel hates competition. Give them a cut, or else...

HSBC boss now minister of state

[MrL0G1C]

HSBC meanwhile, no-one held to account, no-one jailed etc, in fact the boss is now Minister of State for Trade and Investment. and the woman who was supposed to be over-seeing fraud is now Chairman [sic] of the BBC.

And they call Putin a criminal. The criminals are running our governments and our biggest companies.

I remember this

[JustAnotherOldGuy]

I remember this, and I remember thinking at the time that this guy was probably going to get in a shitload of trouble.

He was basically thumbing his nose at the government while playing fast and loose with the currency laws. He was soooooooooo sure that they couldn't touch him because he insisted that he "had the law on his side".

And he may well have, technically speaking, but he lost sight of the fact that "having the law on your side" has never stopped the government from jamming people up if they feel like it. And although it took a while, that's exactly what they did.

Quite a few people who were knowledgeable in currency matters at the time told everyone in no uncertain terms to "stay the hell away" from this guy's scheme, and it turns out that that was good advice.

Re:jurisdiction

[UnknownSoldier]

The US will say they have jurisdiction when ANY American is involved in any business anywhere in the world. It doesn't matter even if you renounce your citizenship. If you are involved in Commerce (in any shape or form) with (past or) present Americans they will get (eventually) get involved.

Under 18 U.S.C. Â 486, it is a Federal crime to pass, or attempt to pass, any coins of gold or silver intended for use as current money except as authorized by law.

Since only gold and silver are legal tender, anything that threatens that monopoly of money infrastructure and status quo is automatically targeted -- even if it is private currency.

New York Times ran an article a few years back ... emphasis added to highlight the shenanigans:

http://www.nytimes.com/2012/10...

His name is Bernard von NotHaus, and he is a professed "monetary architect" and a maker of custom coins found guilty last spring of counterfeiting charges for minting and distributing a form of private money called the Liberty Dollar.

Described by some as "the Rosa Parks of the constitutional currency movement," Mr. von NotHaus managed over the last decade to get more than 60 million real dollars' worth of his precious metal-backed currency into circulation across the country -- so much, and with such deep penetration, that the prosecutor overseeing his case accused him of "domestic terrorism" for using them to undermine the government.

No one was pretending the Liberty Dollar was legal tender. It was clearly a private currency, but simply because it was too popular it got targeted -- you know other the "Golden Rule":

* "He who has the gold, makes the rules"

This government abuse is nothing new. Look at the shenanigans of how whistleblower Brad Birkenfeld exposing the fraud of UBS was treated:

In October 2001, Birkenfeld began working at UBS in Geneva, Switzerland, handling private banking, primarily for clients located in the United States. In 2005, he learned that UBS's secret dealings with American customers violated an agreement the bank had reached with the IRS.

He resigned from UBS in October 2005 and provided written whistleblower complaints to Peter Kurer, Head Counsel for UBS, and other UBS senior executives regarding the illegal practices of U.S. cross-border business.

He is the first person to expose what has become a multi-billion dollar international tax fraud scandal over Swiss private banking. AT THE TIME, despite his unprecedented, extensive and voluntary cooperation, and registering as an IRS whistleblower, Birkenfeld was the only U.S. citizen to be sentenced to jail as a result of the scandal.

The IRS explained its decision by citing Birkenfeldâ(TM)s âoeexceptional cooperationâ and the âoebreadth and depthâ of the information he provided, all of which led to âoeunprecedented actionsâ against UBS

/sarcasm America, the best government money can buy!

--
Only Cowards Censor

Re:What?

[NotAPK]

Without any knowledge of this case, I would guess that it's "trade sanctions".

The US typically walks in and tells everyone how it's going to go down, or else trade sanctions.

The US is a nation of bullies, just look at Cuba, an independent nation doing THEIR OWN THING and the US has just given them shit for decades. And before you go all ape shit at me over the "Missile Crisis" just have a bit of perspective: the US has missiles and other military forces stationed all over Europe and Asia, very close to Russia. Most people, reading a factual account of the USA-USSR cold war will interpret the USA to be the aggressors. Don't flame me, just think about it.

I recommend the BBC documentary The Cold War as a great starting point. Yes, it's almost 24 hours long, but it's an excellent independent portrayal of the entire Cold War and has some excellent interviews with world leaders from the time.

Re:What?

[Opportunist]

The whole reason for the Russians putting missiles on Cuba was the US putting missiles into Turkey.

And lo and behold, the Russians removed their missiles from Cuba and the US removed them from Turkey. Guess it took a knife to the throat of the US to realize that it's not a comfortable feeling.