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Internet Payment Processor Liberty Reserve Accused of Laundering $6 Billion

Soulskill posted about a year ago | from the go-big-or-go-home dept.

Crime 205

pdclarry writes with a followup to this weekend's story that Liberty Reserve, a huge international payment processor, had been shut down and its founder had been arrested. "Liberty Reserve, apparently the Internet bank of choice for criminals, as reported by the NY Times, Wired and Business Week, has been accused of laundering over $6 billion dollars. Incorporated in Costa Rica in 2006, Liberty Reserve allegedly 'facilitated global criminal conduct' and was created and structured 'as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,' Manhattan U.S. Attorney Preet Bharara said in an indictment (PDF) unsealed today. Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant."

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205 comments

as opposed to the 300 trillion (5, Insightful)

maliqua (1316471) | about a year ago | (#43845541)

that HSBC may have laundered..

Re:as opposed to the 300 trillion (4, Insightful)

thesupraman (179040) | about a year ago | (#43845569)

I believe its called 'too big to fail'
Also known as 'the people in power keep their money there'

Re:as opposed to the 300 trillion (2, Interesting)

Anonymous Coward | about a year ago | (#43845607)

I believe its called 'too big to fail'
Also known as 'the people in power keep their money there'

Also known as a bunch of douchebagels who manipulate the market and come whining to the government for handouts when someone calls them out.

What is 300 trillion ? (4, Insightful)

Taco Cowboy (5327) | about a year ago | (#43845891)

Liberty Reserve may have laundered 6 Billion, HSBC may have laundered 300 trillion, but all in all, what does that all mean ?

How come governments can "create" new money out of thin air, trillions at a time, and it's all legal, but when Joe-on-the-street did some side jobs and made some money out of it and does not want it to be taxed, they call it "money laundering" ?

It's all about control, it's all about TPTB exerting their control over us

It's a case of the Great Leader can do everything they want to (even to the point of supplying weapons to some groups of seedy people to fight/kill/murder other groups of seedy people) but you, the Joe-on-the-street, don't get to do anything you want because you just ain't nobody

Re:What is 300 trillion ? (2, Informative)

Anonymous Coward | about a year ago | (#43845943)

They never "create" money. The Fed increases the money supply through Mx. Which has a proportional affect on inflation.

Re:What is 300 trillion ? (1)

Anonymous Coward | about a year ago | (#43846665)

Financial lessons from an AC who can't tell the difference between "affect" and "effect".

Re:"affect" vs. "effect" (1)

Anonymous Coward | about a year ago | (#43847083)

I could care less.

Re:"affect" vs. "effect" (2, Insightful)

gavron (1300111) | about a year ago | (#43847143)

That's what illiterate people always say.

Re:"affect" vs. "effect" (1)

Anonymous Coward | about a year ago | (#43847205)

Your mean.

Re:"affect" vs. "effect" (-1)

Anonymous Coward | about a year ago | (#43847899)

LOL

Re: What is 300 trillion ? (5, Insightful)

Xeranar (2029624) | about a year ago | (#43846287)

Idiots who don't understand fiat currency make me sad. Basically we dillute the money supply as a proportion of the GDP. In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

Re: What is 300 trillion ? (0)

Anonymous Coward | about a year ago | (#43846437)

So even if you work more and more, the government dilutes your work so you will be as if working the same as usual?
God bless the governments of the world for they took upon themselves the great task of redistributing the work of every citizen to those in need.

Re: What is 300 trillion ? (3, Informative)

Anonymous Coward | about a year ago | (#43846629)

So even if you work more and more, the government dilutes your work so you will be as if working the same as usual?

No. It means if you stuff all your money under your mattress and don't do any work at all you're not entitled to a share of a growing economy.

Re: What is 300 trillion ? (2, Insightful)

Anonymous Coward | about a year ago | (#43847793)

Exactly. Inflation is a way to force extremely wealthy individuals to actively invest their money and put it to work, instead of just locking it into a vault and waiting for it to appreciate in value by keeping it out of circulation. Inflation is a partial defense against eternal feudalism. It doesn't necessarily empower the impoverished, but it at least stirs the wealth pot every now and then and shuffles the deck once in a while.

Re: What is 300 trillion ? (1)

EEPROMS (889169) | about a year ago | (#43847895)

inflation is also a great way for government to devalue their debts thus why they all prefer printing money.

Re: What is 300 trillion ? (5, Insightful)

Arker (91948) | about a year ago | (#43846443)

You must make yourself very sad.

"We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it, in private, as they see fit, and we get no say. When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency. And then they get to spend the new currency. Great scam. Of course they try to restrain their greed enough to keep the inflation at a level where the increase in GDP can mask it - they dont want to be set on with torches and pitchforks any more than anyone else does.

Re: What is 300 trillion ? (5, Informative)

ShanghaiBill (739463) | about a year ago | (#43846895)

"We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it

Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it? Maybe because they (along with 99% of all economists) believe that we all benefit from expansionary monetary policy during recessions?

When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency.

Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

Of course they try to restrain their greed ...

Could you please explain how a creditor diluting the currency can be considered "greedy"? You might want to read some history books. In the past the conspiracy nuts were accusing the bankers of suppressing the "common man" by doing the exact opposite of what they are doing today. The most eloquent expression of this was the Cross of Gold [wikipedia.org] speech by William Jennings Bryan.

Re: What is 300 trillion ? (2, Insightful)

Anonymous Coward | about a year ago | (#43847039)

... banks are creditors. FTFY.

Bankers just want to see money circulate so that they can take a cut. The bank will never collapse, you see, because the government will bail the bank out.

Diluting the currency is greedy when the low-interest loans (i.e. used as leverage) are invested in bubbles such as housing, stocks, commodities, currency arbitrage. These things make the value of assets increase, so the rich get richer and the poor find it harder to get out of poverty (must continue to rent instead of being able to buy).

Re: What is 300 trillion ? (3, Insightful)

Arker (91948) | about a year ago | (#43847087)

Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it?

Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion. That means 6.5 times more US currency than *existed* 20 years ago has been *added* to the supply since then, and that's *net* so gross numbers would be even bigger. That's a pretty huge slice of 'pie' even for the richest men on the planet. In the meantime the devaluing aspect that pays for this windfall is spread out evenly among everyone holding US dollars, while the enriching portion hits you alone, so you are taking a relatively small hit for a relatively large return. In sum, your thesis that this is against their self interest is simply ill-founded. Particularly considering that what matters to the very rich is not actual value (since they have more than they could need already) but rather proportional value (since this is the aspect of money that brings power, and at that level money really is only a tool for acquiring power.)

Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

Except that your numbers are heavily massaged for propaganda purposes and dont actually resemble reality. Unemployment numbers only count people that lost their jobs recently (the chronically unemployed become invisible this way) and only people that have no work at all (so people that lose good jobs and have them 'replaced' with minimum wage jobs that they cannot live on dont count as unemployed either.) 'Our' factory utilisation is low because 'we' are busy moving those jobs overseas.

Bryant, for all his flaws and mistakes, was advocating a bimetallic monetary standard, not fiat currency, and your citation of him seems a bit gratuitous.

Re: What is 300 trillion ? (2, Insightful)

ahabswhale (1189519) | about a year ago | (#43847159)

Money supply is largely irrelevant. What matters is inflation and there's very little of it. I could go into why that is but there's no point in arguing with conspiracy theorists. Nice try for another world conspiracy though. You clearly have no understanding how currency is valued.

Re: What is 300 trillion ? (2)

Arker (91948) | about a year ago | (#43847191)

Nice contentless reply. You dont understand inflation, you dont understand how the numbers are massaged, and you couldnt even begin to explain the relationship between currency and value. But you can call me a conspiracy theorist, that should shut me up, right? Never mind that it makes no sense at all. Wave your hands and run away.

Re: What is 300 trillion ? (1)

ahabswhale (1189519) | about a year ago | (#43847283)

Actually, I do understand inflation. You're the one who seems to have no fucking clue what it actually is.

Re: What is 300 trillion ? (0)

Anonymous Coward | about a year ago | (#43847233)

But when you the the CPI calculation to specifically hide inflation? Using methods that were used before Clinton and Bush Jr. current inflation measure greater than 6% annually.

Re: What is 300 trillion ? (0)

Anonymous Coward | about a year ago | (#43847435)

"World conspiracy", you're outing yourself as another fruitcake. Nobody is advocating such a thing in the thread, so wake up and smell the (price inflated) coffee!

Re: What is 300 trillion ? (0)

Anonymous Coward | about a year ago | (#43847271)

>>Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

That's the kind of insanity that's driving the US deeper into the hole. Doubling down on failed policies won't turn the economy around, and such failed policies haven't even worked as advertised for the last several years.

And bankers are paid depending on the amount of money supply, so yes, diluting the currency is one way that their greediness benefits their compensation.

Re: What is 300 trillion ? (4, Insightful)

ShanghaiBill (739463) | about a year ago | (#43847483)

That's the kind of insanity that's driving the US deeper into the hole. Doubling down on failed policies won't turn the economy around, and such failed policies haven't even worked as advertised for the last several years.

The opposite of what America is doing is called "austerity". That is what Europe is doing. Two years ago we both had near 10% unemployment. Today, America is at 8% and Europe is at 12%. In the face of this reality, I think you look pretty foolish arguing that America's monetary expansion is wrong and we should be more like Europe. It is important to balance budgets and pay down debts, but trying to do it in the middle of a recession is nuts.

Wow, that's confused (2, Informative)

Anonymous Coward | about a year ago | (#43847339)

"Do you understand that banker are creditors, who benefit from a strong currency?"
They don't care, they lend in dollars and receive dollars, not lend in dollars and receive euros. They don't benefit from a strong dollar, they benefit from receiving more dollars.

"Except that inflation is near record lows, despite trillions in new money."
Implosion + Explosion = zero
Without the money printing, the economy is contracting. People who made successful things should be getting richer as the dollar increases, but instead the banks are, by money printing.

"Could you please explain how a creditor diluting the currency can be considered "greedy"?"
http://en.wikipedia.org/wiki/Hyperinflation

GP post was 100% correct, a clear understanding of what happens. You create things of value, the banks print the money corresponding to it, and spend that. When the USA is contracting, the money supply contracts, they print more dollars and spend those to balance it out. It's a unfair system that hands wealth to bankers.

The bankers put the money largely into fake Wallstreet assets (CDS's CDR's Derivatives etc. are simply betting slips where the bookies both accept the bank bets and borrow money from the banks to pay out). The great thing about these assets is the Chinese can't make them cheaper, because they cost nothing to make! So you create money, stuff it into fantasy assets less solid than Bitcoins, and that money dilutes the dollars to stop deflation.

" In the past the conspiracy nuts were accusing the bankers of suppressing the "common man" by doing the exact opposite of what they are doing today."
In the past present and future, people without arguments use the 'conspiracy nuts' claim as a weak ad hominen attack.

Re: What is 300 trillion ? (0)

Anonymous Coward | about a year ago | (#43846493)

The GP said it wrong. How come the Federal Reserve(a non government entity) has complete control of the creation of our money supply? Plus he said nothing of gold so straw man much?

Re: What is 300 trillion ? (1, Insightful)

pla (258480) | about a year ago | (#43846575)

In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

Damn, I've never seen it put quite so eloquently! So as the GDP grows, the value of each "share" of that decreases accordingly. Though at the same time, the proportion of shares going to the rich keeps increasing. Hmm...

I can't really think of many better arguments for investing in metals (or hell, vintage Garbage Pail Kids cards for that matter! Just about anything but US Dollars, really). I would say "land" instead, but countless examples have proven that most towns simply view landowners as ATMs to tap as needed.

Re: What is 300 trillion ? (2)

Zemran (3101) | about a year ago | (#43847209)

I had a Fiat once, total crap.

Re:as opposed to the 300 trillion (0)

Anonymous Coward | about a year ago | (#43845697)

More appropriately "To big to jail."

Re:as opposed to the 300 trillion (1)

LarryWest42 (220323) | about a year ago | (#43845709)

Or "Too big to jail."

ABC News from March 2013 [go.com] .

Re:as opposed to the 300 trillion (5, Insightful)

anagama (611277) | about a year ago | (#43845595)

Came here to make an HSBC quip.

Although Matt Taibi has it at 10 Billion, his description of the settlement with HSBC is sadly hilarious:

Wow. So the executives who spent a decade laundering billions of dollars will have to partially defer their bonuses during the five-year deferred prosecution agreement? Are you fucking kidding me? That's the punishment? The government's negotiators couldn't hold firm on forcing HSBC officials to completely wait to receive their ill-gotten bonuses? They had to settle on making them "partially" wait? Every honest prosecutor in America has to be puking his guts out at such bargaining tactics. What was the Justice Department's opening offer -- asking executives to restrict their Caribbean vacation time to nine weeks a year?

http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213 [rollingstone.com]

Anyway, one thing is clear. Liberty Reserve didn't donate enough to Obama's campaign to get a slap on the wrist and and a cabinet post.

Re:as opposed to the 300 trillion (0)

Anonymous Coward | about a year ago | (#43845653)

Every honest prosecutor in America

Wait, what? Honest prosecutor? In America? As in, the USA?

Puh-Lease.

Re:as opposed to the 300 trillion (5, Funny)

colinrichardday (768814) | about a year ago | (#43845671)

Universal claims over the empty set are true. Now if he had written "Some honest prosecutor in America", you would have a point.

Re:as opposed to the 300 trillion (0)

Anonymous Coward | about a year ago | (#43845663)

ORLY?

Maybe not so much... [guardian.co.uk]

Re:as opposed to the 300 trillion (-1)

Anonymous Coward | about a year ago | (#43845787)

ORLY?

No, ANLY... [wikimedia.org]

Re:as opposed to the 300 trillion (0)

Anonymous Coward | about a year ago | (#43846019)

Damned activist judges! How dare they overrule the executive branch on judicial matters!

Re:as opposed to the 300 trillion (4, Interesting)

anagama (611277) | about a year ago | (#43846299)

Good on Judge Gleason! I'm glad to hear that he may torpedo that travesty of a deal. Still, Obama's legal team is working hard to protect the banksters:

The deal -- known as a deferred prosecution agreement (DPA) -- meant HSBC was exempt from prosecution and triggered a storm of criticism. Judge John Gleeson is now believed to be considering rejecting the deal, a move that could leave HSBC facing a criminal prosecution and the threat that its charter to do business in the US could be revoked. ... The justice department is believed to be challenging the need for Gleeson's approval after failing to get a quick signature while the judge is upholding his opinion that he must sign off on the DPA.

Re:as opposed to the 300 trillion (5, Informative)

dkleinsc (563838) | about a year ago | (#43845777)

Anyway, one thing is clear. Liberty Reserve didn't donate enough to Obama's campaign to get a slap on the wrist and and a cabinet post.

I don't think that's the issue here: According to opensecrets.org, in the 2012 cycle, HSBC gave only about $30K to Obama and $23K to Romney. By comparison, Goldman Sachs spent about $8 million on lobbying and "donations" (a.k.a. bribes). So I don't think HSBC bought them off at the highest level, I think they might have simply offered some extremely well-paid and cushy jobs to the bureaucrats investigating their crimes to convince them that they couldn't find specific wrongdoing on the part of specific people.

But put me in the camp that says that both HSBC execs and Liberty Reserve execs should probably be in jail for this. Or even better, you might take George Carlin's advice:

And you know, in this country, now there are alot of people who want to expand the death penalty to include drug dealers. This is really stupid. Drug dealers aren't afraid to die. They're already killing each other every day on the streets by the hundreds. Drive-bys, gang shootings, they're not afraid to die. Death penalty doesn't mean anything unless you use it on people who are afraid to die. Like... the bankers who launder the drug money. The bankers, who launder, the drug money. Forget the dealers, you want to slow down that drug traffic, you got to start executing a few of these bankers. White, middle class Republican bankers.

Re:as opposed to the 300 trillion (2)

anagama (611277) | about a year ago | (#43846321)

Oh man -- I'm anti-death penalty ... but Carlin justmight make me reconsider!

Re:as opposed to the 300 trillion (0, Troll)

Anonymous Coward | about a year ago | (#43845823)

as opposed to the 300 trillion ... that HSBC may have laundered.

Although Matt Taibi has it at 10 Billion

Matt Tailbi's lowball $10 Billion and anyone that cites it is another apologist for capitalist tyranny!!!!!111!!oneone.

</sarcasm-off-for-the-slow-witted>

The gp's $300 trillion is the total amount of all HSBC wire transfers for a three year period, legitimate or otherwise. Libtards think all bank transactions amount to money laundering. It's liberal axiom now that HSBC+Wacovia+WellsFargo+etc. laundered some hundreds of trillions of dollars.

The entire annual Gross World Product is only 80 trillion and change.

Re:as opposed to the 300 trillion (1)

Anonymous Coward | about a year ago | (#43845845)

I guess it's no big deal since it's only $10B.

Re:as opposed to the 300 trillion (3, Insightful)

Anonymous Coward | about a year ago | (#43846135)

It's amazing that anyone is surprised by this. HSBC is part of the establishment and therefore exempt from the penalties that the little people have to face.

Imagine this. 0.1% of human beings have managed to strip mine the world's wealth. They understand that the only way to keep the other 99.9% of humans from murdering them and taking all their stuff is to keep them so stressed out that they can't think straight enough to notice.

When you are worried about terror, paying your mortgage, keeping or getting a job, celebrity scandals, what that other political party/religion/lifestyle choice group is thinking/saying/doing which is an obvious personal assault on your freedoms then you are not thinking critically about anything -- you just don't have time.

The reality in which most people live is continually re-defined by that 0.1%. Your politicians, priests, bankers, CEOS, and celebrities -- they manufacture a reality that you buy into and will defend to the death.

Re:as opposed to the 300 trillion (1)

Anonymous Coward | about a year ago | (#43846359)

Newsflash: the TARP bailout occurred during George W. Bush's watch. Henry Paulson, Sec'y of Treasury, Christopher Cox, Chairman of the SEC.

Sorry right wing. Just saying "Obama did it" 10,000,000 times doesn't make it different.

Re:as opposed to the 300 trillion (1)

kwbauer (1677400) | about a year ago | (#43846767)

Started under GWB with heavy Dem suppport and pushing. Finished under Obama and mostly paid out under Obama.

Also, Paulson's replacement was on the lobbying side during the negotiations under GWB, so yes, Obama's team owns it as much or more than GWB.

Re:as opposed to the 300 trillion (4, Interesting)

Anonymous Coward | about a year ago | (#43845635)

Or the $420 billion laundered by Wachovia [wikipedia.org] , for which they paid a $160 million fine.

This is almost certainly less than the profit they made - international money transfers are not cheap - and nobody was prosecuted.

It really is one law for the rich...

Re:as opposed to the 300 trillion (5, Informative)

Anonymous Coward | about a year ago | (#43845659)

I'll just leave this right here...

http://www.guardian.co.uk/business/2013/may/23/hsbc-court-threat-money-laundering-charges

Re:as opposed to the 300 trillion (1)

Anonymous Coward | about a year ago | (#43845713)

How dare you post facts!

Re:as opposed to the 300 trillion (1)

Anonymous Coward | about a year ago | (#43845771)

Why doesn't the judge just order them to split up like Bell? Separate the bank and then address the illicit activities individually by region? Or suffer not doing business in the US.

Re:as opposed to the 300 trillion (0)

Dunbal (464142) | about a year ago | (#43846677)

An American judge order the splitting of the HONG KONG SHANGHAI BANK OF CHINA? Yes, that's what HSBC means.

Re:as opposed to the 300 trillion (3, Insightful)

pla (258480) | about a year ago | (#43846883)

An American judge order the splitting of the HONG KONG SHANGHAI BANK OF CHINA? Yes, that's what HSBC means.

The last "C" stands for "Corporation", actually, but close enough.

And yes, an American judge (albeit it with the name "Roberts", since the case would unavoidably end up with the USSC) could order them split up for the purpose of acting as a corporate entity in the US. Worldwide, we can't do much about them. If they want to do business in the US, however, we have every right to insist on the terms under which we allow them to do business in out country.

Re:as opposed to the 300 trillion (1)

swalve (1980968) | about a year ago | (#43845707)

I think that's more than the Gross National Product of the entire world, since the beginning of time.

Re:as opposed to the 300 trillion (1)

NemosomeN (670035) | about a year ago | (#43845775)

Maybe not if you adjust for inflation, but it is certainly more than could have possibly been laundered. Even at a 1% fee for laundering it, which I imagine is on the low end, HSBC would be the largest organization in the world, by far.

Re:as opposed to the 300 trillion (0)

Anonymous Coward | about a year ago | (#43845795)

I think that's more than the Gross National Product of the entire world, since the beginning of time.

The derivatives market is (nominally) worth a lot more than the the GDP of all countries, so the numbers are pretty high when that gets involved.

Re:as opposed to the 300 trillion (0)

Anonymous Coward | about a year ago | (#43845925)

Just because one organization got away with it, that doesn't mean all the scumbags should.

Re:as opposed to the 300 trillion (1)

fuzzyfuzzyfungus (1223518) | about a year ago | (#43846219)

that HSBC may have laundered..

Blue collar crime does not pay...

Re:as opposed to the 300 trillion (1)

Zemran (3101) | about a year ago | (#43847189)

but they give the US their cut so it is OK. I work in various countries and have had to get used to the simple fact that money laundering just means not giving a cut to the US. I can shift as much money as I like from any country to any country without question as long as I pay 6% but if I take too much of my hard eant money in cash from one country to another I am called a money launderer. All the guff about criminals is just guff. Criminals can use any system, but good people and bad people want to save money by using the best and the cheapest. Liberty Reserve was cheaper because it was not paying the US and that is what this is about. There is more crime going on on Paypal but they pay the US their cut. People like HSBC are helping corrupt governments to shift their money but the US gets its cut so that is OK.

Re:as opposed to the 300 trillion (1)

mvdwege (243851) | about a year ago | (#43847705)

That's a really facile and useless quip.

Just because murders and rapists exist does not make it right to rob you, for example. This 'tu quoque' argument is a fallacy precisely because while it may point out the hypocrisy in one party, it does not address the right or wrong of the action under discussion.

So, simply on the facts, is money-laundering a crime, and did LibertyReserve engage in it? Tough shit. They brought the prosecution on themselves then.

karma truck (5, Insightful)

magarity (164372) | about a year ago | (#43845563)

"a rising sense of panic as fortunes have disappeared in an instant"

So now they know how their victims feel?

Re:karma truck (1)

iggymanz (596061) | about a year ago | (#43845575)

let's hope the scum weeds out other scum in revenge

Re:karma truck (1)

girlintraining (1395911) | about a year ago | (#43845749)

So now they know how their victims feel?

Money laundering outfits like this rarely take down just criminals. There are legitimate reasons for currency conversion, etc., that both companies and private individuals engage in. Money laundering works by throwing good money in with bad and obfusciating which is which;

Undoubtedly some innocents will be harmed by this draconian action. But don't let that scare you off getting righteous about the whole affair. In other news, your bank stole nearly killed the world economy, and cost trillions upon trillions in a global recession triggered by greed. But it's okay -- they bought the laws and legislators they later used to screw everyone over; This company's main problem is they didn't pay in enough in campaign contributions.

I'm only half-joking. :/

Re:karma truck (1)

Bill, Shooter of Bul (629286) | about a year ago | (#43846115)

This is only idiots trust their money to a corporation that doesn't follow the laws. It will attract criminals, and eventually they'll end up without their money.

Re:karma truck (2)

girlintraining (1395911) | about a year ago | (#43846291)

This is only idiots trust their money to a corporation that doesn't follow the laws.

Every company you've purchased something from recently has broken the law. Every. Last. One. And you want to know how I know? Because even our own government can't keep track of the number of laws on the books. Our legal system is hopelessly complex; People break the law just making dinner these days (no really; google for 'short salmon').

It will attract criminals, and eventually they'll end up without their money.

Yes, and in the same way, if a couple terrorists hole up in a hospital, we should just blow up the entire hospital, killing everyone inside... because otherwise it will attract criminals, right? Collateral damage apparently isn't a problem for you.

Re:karma truck (1)

Yaur (1069446) | about a year ago | (#43846157)

Liberty Reserves MO was high on fees and low on questions. I suppose there could theoretically be a reason to use them, but the only people I know who carried a balance with them got said balance from HYIPs... so I can't feel too bad for them.

Re:karma truck (2)

Paperweight (865007) | about a year ago | (#43846351)

(Sobstory warning) Yeah. I bought some bitcoins a couple years ago to use to try to develop a new escrow service for them. I never felt good enough about that project to launch it, though.
They went up in value to $800, so I listened to Slashdot and sold them when they were worth about 1/10 as much as they would be today. Back then, the only way to get your money out of Bitcoins for a Canadian was from Mt. Gox to Liberty Reserve, then to private traders. I gradually traded $200 of that LR out for cash and was going to use the last $600 to help pay for tuition this fall.
But oh well, the little guy always gets screwed in the end. I'm sure the real criminals got their money out before LR went down. I was too busy with real life.

Re:karma truck (4, Funny)

Anonymous Coward | about a year ago | (#43846671)

"..., so I listened to Slashdot..."

You're lucky to be alive.

How is this news? (4, Interesting)

haruchai (17472) | about a year ago | (#43845565)

There's a financial agency that's not a money-laundering operation? We live in interesting times.

Read the indictment it's 100% innuendo (1)

Anonymous Coward | about a year ago | (#43846861)

Read the indictment, there's nothing in it. It's all innuendo.

"The Criminal Design of Liberty Reserve"...."clients had to provide name address etc, but DIDN'T HAVE TO PROVE IT! OMG., yeh criminal!

15. Users could send each other money. OMG! Criminals. Users could send it anonymously! OMG Criminal, the ability to send anonymous donations is surely a crime!

Really the whole indictment is like this, IT IS NOT A CRIME TO *NOT* DEMAND PROOF OF ID. It's an OECD recommendation ('know your customer') some countries follow and others don't. THERE IS A FUNDAMENTAL RIGHT TO PRIVACY. There was and is no reason sending money to someone should require you to disclose your identity. and your privacy right should ensure it.

Really it's simple, the USA has not business knowing the bank transactions of the world, it has no business stealing the SWIFT data, and now that it's trying to get internal SEPA data too. I assume they wanted the Liberty Reserve data too and were rejected, hence these charges.

Spain should reject this.

The rule of the New World Order (1)

ub3r n3u7r4l1st (1388939) | about a year ago | (#43847407)

LR went too big and decide not playing by the rules of the "establishment" and hand over the data requested. This is what they get in return.

Remember UBS get bullied to hand over depositor information to the IRS?

not good news (1)

Anonymous Coward | about a year ago | (#43845581)

This cannot be good news for the likes of Mitt Romney.

Re:not good news (0)

Anonymous Coward | about a year ago | (#43845627)

This cannot be good news for the likes of Mitt Romney.

Bad news... Brought to you by the Bank of Jesus Christ of Latter Day Saints.

Oh ye cynical bastard (1)

Impy the Impiuos Imp (442658) | about a year ago | (#43845687)

Live by the sword...

Ha. In any case, I'll bet the government impetus to clamp down on this is more driven by an inability to collect taxes than inherent legal disapproval of the activities.

Keep your eyes on the real criminals (1)

nickmalthus (972450) | about a year ago | (#43845691)

I find it ironic that the attorney general and law enforcement agents got all worked up about a six billion dollar scheme while the federal reserve corporation pumped out trillions of dollars to mask banker fraud and said bankers have yet to face signficant regulator oversight and proscecution. It is kind of like those small yappy dogs you see in peoples yards chained to a short leash. So excited to serve and protect but restrained by their master.

Re:Keep your eyes on the real criminals (4, Informative)

dkleinsc (563838) | about a year ago | (#43845877)

the federal reserve corporation pumped out trillions of dollars to mask banker fraud

No they didn't. The Federal Reserve pumped out trillions of dollars because that's what the Federal Reserve is supposed to do in a recession. They pumped out a lot of cash after the S&L collapse in the 1980's too, when the bankers weren't protected and many went to jail.

And I'm not saying the Fed shouldn't be questioned or examined, but that's not in the category of things they've done that's actually wrong or fraudulent in some way.

Re:Keep your eyes on the real criminals (0)

Anonymous Coward | about a year ago | (#43846059)

the federal reserve corporation pumped out trillions of dollars to mask banker fraud

No they didn't. The Federal Reserve pumped out trillions of dollars because that's what the Federal Reserve is supposed to do in a recession.

And what pray tell caused that recession? Why, the collapse of the mortgage market, which was largely based on FRAUD.

Re:Keep your eyes on the real criminals (0)

Anonymous Coward | about a year ago | (#43846589)

The Fed is increasing the size of their balance sheet, not giving out free money directly. The free money to the banks is profiting from the spread.

Your comment makes no sense.

Re:Keep your eyes on the real criminals (1)

anagama (611277) | about a year ago | (#43846363)

Except this time, unlike the S&L crisis, NOBODY is going to jail. Google:

William K Black (http://en.wikipedia.org/wiki/William_K._Black)

And just read any random thing he's written or transcript from an interview he's given.

Re:Keep your eyes on the real criminals (0)

Anonymous Coward | about a year ago | (#43846611)

You mean like all the millions sent to Gaddafi months before we started launching missiles? Or all the other things they "can't" tell us about?

If we didn't have a fed, and had ANY legitimate monitary system not built upon discouraging good behavior (saving) and encouraging bad behavior (reckless lending), and perhaps one that didn't maintain inflation on purpose, write endless blank checks to cover wars and other costly policies that would otherwise be unfunded, and maybe one that didn't rely on foreign policy actions such as requiring oil to be priced in USD or risk a trade war like Iran.... ... how do you think people would react to the idea of a government controlling, sort of, a currency and manipulating it for such shit ends?

We have been sold some magic beans and they are hoping we just eat them and die of the ricin. Wake up.

They bought worthless assets for dollars (1)

Anonymous Coward | about a year ago | (#43846921)

They bought worthless assets (CDSs failed shopping malls etc.) at 100% face value. Creating a fraudulent market for those assets using printed dollars. Those assets are being cleared at a loss and the loss being kept in the books of the Fed.

The Fed can lend money at low rates during a recession, but that's far from the accounting fraud they committed. Even now we hear all of that TARP money has been repaid, it hasn't, that would be deflation! It was just shifted to loans not called 'TARP'!

Same with the current government bond buying spree. Without the fed printing money and buying government debt, there are not enough buyers for it. Yet Congress won't budge, and the deficit continues to increase.

"They pumped out a lot of cash after the S&L collapse in the 1980's too"
They got away with it once already! How is that even an argument? The magnitude of this round is so huge that the Feds had to threaten rating agencies to stop them downgrading the dollar.

Re:Keep your eyes on the real criminals (0)

Anonymous Coward | about a year ago | (#43846105)

You're referring more to TARP than the Fed. Quantitative easing via the Fed is for getting the economy going again. It's simply adding to the money supply so banks will lend more thereby stimulating GDP.

If TARP failed then the taxpayer would have directly "bailed out" the banks. But instead the money was paid back in full with 20%+ interest to the gov't. The real crime against the taxpayer is that none of the AIG, upper level banking execs and rating agencies were criminally prosecuted. Mainly for fraudulently packaging mortgages and selling the crap to pension funds, the notional value of the derivatives are still buried below the balance sheets. The administration basically gave them a get out of jail free card, and worse, free reign to do it again (too big to fail).

By almost all accounts it was Tim Geithner that was responsible for arguing leniency for the banks. And it worked.

Re:Keep your eyes on the real criminals (0)

Anonymous Coward | about a year ago | (#43846293)

Quantitative easing via the Fed is for getting the economy going again. It's simply adding to the money supply so banks will lend more thereby stimulating GDP.

But they don't lend more because it's not profitable. Instead they sink it into the stock market and create other bubbles which will later burst and require more bailouts and more "quantitative easing". The whole thing is bullshit and can't possibly work, yet they keep pouring money down the toilet and screw any real chance of productive capital formation.

TARP was not paid back at all (1)

Anonymous Coward | about a year ago | (#43846989)

That's absolutely false, TARP was money pumped in the system to create inflation comparable to the deflation the failed assets would lose. TARP money can never be paid back, it would cause deflation.

The loans have simply been shifted from one debt instrument, TARP, to other debt instruments.

You borrow money with repayments made in US dollars, you pay it back later in devalued dollars. The difference in value between the original loan and the repayments plus interest is how the USA sustains its trade losses.

If you ever have devaluation, the dollar doesn't drop in value, the repayments are then worth equal or more to the money loaned. That is catastrophic as the debt is crippling and you can't simply borrow your way out, as you've done before,

So we currently have a situation where foreign buyers don't want the debt in dollars anymore, the Federal Reserve is printing money and buying long term treasuries (debt), there is a current block of treasuries that need repaid, and that must be made in devalued dollars or the USA becomes poorer. So we have a lot of creative accounting going on, and no actual Congregational budget control.

The risk is flight of capital. That means that ways to send 'value' out of the USA have to be controlled. Bitcoin has been attacked, Liberty Reserve is under attack.

Re:Keep your eyes on the real criminals (1)

Arker (91948) | about a year ago | (#43847281)

You're referring more to TARP than the Fed. Quantitative easing via the Fed is for getting the economy going again. It's simply adding to the money supply so banks will lend more thereby stimulating GDP.

The economy is not a car, there's no engine to stall. No expert can fix it, there's no 'it' at all. The economy is US, we dont need a mechanic. Put away the wrenches, the economy is organic. [youtube.com]

Heh. (1)

Black Parrot (19622) | about a year ago | (#43845763)

Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant.

Are you sure this wasn't just a MMORPG?

Re:Heh. (2)

esampson (223745) | about a year ago | (#43845989)

Three thousand hours, three thousand hours clicking on that mouse, collecting weapons and gold. It's almost as if it was a huge waste of time.
--Sheldon Cooper

Six dollars billion dollars (4, Funny)

honestmonkey (819408) | about a year ago | (#43845963)

I like that they laundered "$6 billion dollars". So one guy, Mr. Six Dollars had his billion dollars laundered? Or was it a billion and six dollars? A billion dollars worth of six dollar bills? Or is it that the dollar sign or the word 'dollars' was redundant? Hmmmmm.

Their mistake: (2)

140Mandak262Jamuna (970587) | about a year ago | (#43846047)

The mistake they did was, they did not launder enough money. If they have done may be 300 billion or more and insinuated themselves deep into many national economies, then they would have become too big to fail, too big to jail.

global criminal conduct (1)

Mister Liberty (769145) | about a year ago | (#43846067)

Why is it that reading ''global criminal conduct' makes me think
of states, whether or not united, first.

doesnt Google use illicit banking practices? (0)

Anonymous Coward | about a year ago | (#43846207)

zzzz....

Bank Accounts (1)

Anonymous Coward | about a year ago | (#43846355)

It should be noted that none of the bank accounts were in Costa Rica. The guys just happened to live in Costa Rica, all of the actual money laundering took place in general western countries like the USA, Spain and the Netherlands.

Re:Bank Accounts (0)

Anonymous Coward | about a year ago | (#43846945)

It should be noted that none of the bank accounts were in Costa Rica.

Why? (Especially as the indictment lists 10 bank accounts in Costa Rica and that 19.5 million was seized by the Costa Rican government).

Attack on digital currency (3, Insightful)

Neo-Rio-101 (700494) | about a year ago | (#43846663)

We all know that this is the first salvo being fired at digital currencies.

The "powers that be" running the world's major banks in concert, can't have any currency run outside of their control and manipulation, because then they would lose their grip on the world's economies (and in turn, their people) to do their bidding.

If they can't latch control onto Bitcoin or other currencies, they will attempt to stifle it's ascendancy, or drive it far underground.
Remember that they only manage to control the world because we have to use the major currencies under their control, which gives them their license to print credit at the cost of everyone's freedom who actually has to do the work for it's creation.

Re:Attack on digital currency (1)

uvajed_ekil (914487) | about a year ago | (#43847225)

That's exactly what this is. I don't doubt that Liberty Reserve was used to launder some money, but that isn't what this is really about. Or at least there is a bigger issue than money laundering, which is an attempt to kill digital currencies that governments can not control. With its central authority Liberty Reserve was a much easier target than say, Bitcoin. Make no mistake about it, lots of governments would just love to squash Bitcoin because they fear losing control over money, but they'll have to settle for payment processors and intermediaries, at least for now.

Re:Attack on digital currency (1)

ub3r n3u7r4l1st (1388939) | about a year ago | (#43847421)

They can literally manipulate, and force people to flee away from bitcoin if they can manage to take control above 51% of the network computing power. The government have the money to build such computing infrastructure.

Re:Attack on digital currency (1)

Neo-Rio-101 (700494) | about a year ago | (#43847693)

I would forget about governments attempting that.... but banks? Almost certainly.

Actually trading bitcoin on a spot market would be completely unworkable however, because without any mechanism for guided market maker manipulation, price fluctuations would happen at complete random (which has been the case with bitcoin historically).
Professional currency traders specifically look for price manipulation opportunities to make consistently profitable trading decisions. Without the manipulation, you may as well leave wall street and head to the casino.

Yes, the very fact that major currencies are manipulated *should*, quite rightly, blow your mind as to what that means for life on this planet...., given that the media, books on economics, and hundreds of failed traders would tell you that the market is somehow random.
Well somehow people find a living off day trading wall street. If they can't do it consistently, how else are they doing it?

Re:Attack on digital currency (0)

Anonymous Coward | about a year ago | (#43847229)

They'll never take our pogs.

Just another fake crime (0)

Anonymous Coward | about a year ago | (#43847033)

Who gives a shit. Kill all the authoritarian retards and let people exchange money like free citizens, rather than slaves.

The Jews would have disagree with you (-1)

Anonymous Coward | about a year ago | (#43847359)

It is their goal to enslave all gentiles.

This sounds familiar... (0)

ikhider (2837593) | about a year ago | (#43847627)

"Liberty Reserve allegedly 'facilitated global criminal conduct'", you mean like the illegal invasion of Iraq, the (avoidable) war in Vietnam, the support of South American despots? The enabling of third world labour and resource exploitation? The pillaging of natural resources that belong the natives of Africa? You mean how mega corporations launder their money and don't pay taxes? I say we deal with the bigger criminals first, before going after the petty ones.
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