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Tag: Arthur Budovsky

  • FEDS: Liberty Reserve Figure Mark Marmilev Shilled On TalkGold Ponzi Forum And Also Hired Shills To Do So; Memo Speaks To Vast Wasteland Of Online Criminality

    recommendedreading1Mark Marmilev, the technology specialist for the cross-border Liberty Reserve money-laundering operation favored by HYIP scammers and other criminals before its May 2013 collapse, shilled on the TalkGold Ponzi forum, U.S. federal prosecutors said in a sentencing memo.

    Marmilev, 35, of Brooklyn, N.Y., also hired forum shills and separately tried to hatch an SEO scheme to “clean up” accurate online references to his boss Arthur Budovsky, the office of U.S. Attorney Preet Bharara of the Southern District of New York said in the memo.

    U.S. District Judge Denise L. Cote yesterday sentenced Marmilev to five years in federal prison.

    In Marmilev’s mind, the SEO scheme was needed because a press release by the Manhattan District Attorney’s Office about Budovsky’s indictment in a 2006 case was causing problems.

    “Marmilev proposed that the SEO expert publish information on the Internet falsely suggesting that the ‘Arthur Budovsky’ behind Liberty Reserve was a different person from the ‘Arthur Budovsky’ who was convicted by the Manhattan District Attorney, but who simply happened to have the same name,” prosecutors advised Cote. “Marmilev’s evident purpose in doing so was to distance Liberty Reserve from Budovsky’s criminal conviction, in an effort to promote an appearance of legitimacy for Liberty Reserve.”

    Said Bharara, “Mark Marmilev spent years designing and maintaining the technological architecture that allowed Liberty Reserve to operate a global payment processor and money transfer system that catered to criminals. Now, he will pay for that crime with five years in federal prison.”

    There are all kinds of remarkable tidbits in the Dec. 9 sentencing memo, which was posted at the RealScam.com antiscam forum by “NikSam.”

    RealScam, which covers international mass-marketing fraud, recently was targeted in an SEO campaign designed to link it to Jihadists and Islamic terrorists. (See PP Blog reference here. See RealScam thread here.)

    Court references to the TalkGold and MoneyMakerGroup forums as places from which Ponzi schemes are promoted date back years.

    In a current case of trying to confuse the public, veteran HYIP scammer “Ken Russo,” also known as DRdave, is using MoneyMakerGroup in a bid to deflect criticism of the emerging “Achieve Community” scheme.

    In a Dec. 10 conference call, Achieve Community was positioned as a good outlet for female senior-citizens with ailing husbands to direct cash.

    As BehindMLM.com reported today (italics added):

    Liberty Reserve’s two founders have yet to be sentenced, but you can bet they’re going to be receiving similar if not harsher penalties than Marmilev’s 5 year sentence.

    The jailing of a Liberty Reserve executive comes on the eve one of the larger Ponzi schemes in operation today gears up to announce their new payment processor.

    After a short-lived run with Payoneer, they terminated their relationship with Achieve. The scheme has yet to hook up with a replacement payment processor.

    Last week news broke that incoming investment into the scheme was now being handled by iPayDNA, but nothing yet has materialized on the withdrawal front.

    iPayDNA appear to be accepting investments from Achieve affiliates using multiple unrelated business entities originating out of China.

    The PP Blog hopes readers will take the time to read the sentencing memo posted by NikSam. Here’s another tidbit (italics/bolding added):

    Aftermath of Liberty Reserve Shutdown. Following the shutdown of Liberty Reserve in May 2013, law enforcement agents monitoring various online criminal forums (such as “hacking” or “carding” forums) observed numerous postings by users of these forums bemoaning Liberty Reserve’s closure and the resulting loss of funds that they had on Liberty Reserve’s system. Many users complained of losing tens of thousands of dollars or more that they had in their Liberty Reserve accounts. By contrast, very few Liberty Reserve users have contacted the Southern District of New York seeking to recoup their Liberty Reserve funds on the basis that they were conducting legitimate business on the site. When the Liberty Reserve takedown was announced to the public in May 2013, users were instructed to contact the Southern District of New York if they wished to recoup their funds.

    Notwithstanding that Liberty Reserve had more than 5 million registered user accounts, only 32 persons have contacted the Southern District of New York from May 2013 to September 2014. Similarly, notwithstanding that numerous Liberty Reserve accounts were doing a high volume of business as Liberty Reserve “exchangers,” only one Liberty Reserve exchanger has contacted the Southern District of New York about a potential claim since May 2013, and that claim was ultimately not pursued

    NOTE: Our thanks to the ASD Updates Blog.

  • Halloween Day Guilty Plea For Liberty Reserve Figure Vladimir Kats

    ponzinews1Before Liberty Reserve and its alleged co-conspirators were indicted in May, the company was involved in several horror-filled propositions. These included laundering $6 billion as part of schemes involving “credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking,” federal prosecutors said.

    Now, Liberty Reserve figure Vladimir Kats, also known as “Ragnar,” has pleaded guilty to multiple crimes. The plea occurred yesterday: Halloween Day.

    Liberty Reserve, prosecutors said, set the stage for criminals to thrive and functioned as “as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals to conduct anonymous and untraceable financial transactions.”

    “Vladimir Kats, by his own admission, helped to create and operate an anonymous digital currency system that provided cybercriminals and others with the means to launder criminal proceeds on an unprecedented scale,” said Acting Assistant Attorney General Mythili Raman. “His conviction reinforces what we said when Liberty Reserve was first brought down: banking systems that allow criminals to conduct illegal transactions anonymously will not be allowed to stand, and professional money launderers will be brought to justice.”

    It all added up to danger and created “an international den of cybercrime,” added U.S. Attorney Preet Bharara of the Southern District of New York.

    “As a co-founder and operator of Liberty Reserve, Vladimir Kats served as a global banker for criminals, giving them an anonymous, online forum to hide the proceeds of their illegal and dangerous activities,” Bharara said.

    Kats, 41, of Brooklyn, N.Y., potentially faces decades in federal prison. No sentencing date has been sent.

    From a statement by prosecutors (italics added):

    Kats was arrested in Brooklyn in May 2013 and pleaded guilty today to one count of conspiring to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of conspiring to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison; one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison; one count of receiving child pornography, which carries a maximum sentence of 40 years in prison and a mandatory minimum sentence of 15 years in prison; and one count of marriage fraud, which carries a maximum sentence of five years in prison.

    Charges remain pending against Liberty Reserve founder Arthur Budovsky and alleged co-conspirators Ahmed Yassine Abdelghani, Allan Esteban Hildago Jimenez, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev, prosecutors said.

  • BULLETIN: New South Wales Police Arrest Man For Fraud Crimes Allegedly Linked To Liberty Reserve

    breakingnews72BULLETIN: (UPDATED 11:43 P.M. EDT U.S.A.) The New South Wales Police Force (Australia) has arrested a 21-year-old man, amid allegations he was laundering money through Liberty Reserve. Officials did not identify the man in a news release announcing the arrest, but said he did not apply for bail and remains in custody.

    In a statement, police said the man was charged with one count of knowingly dealing with proceeds of crime with intent to conceal, one count of unauthorized function with intent to commit a serious offense and five counts of fraud.

    From the NSW Police Force (italics/bolding added):

    Last month, police officers from the Fraud and Cybercrime Squad formed Strike Force Kaye to investigate a large number of electronic devices, which were found following a search warrant at a property in The Rocks on 10 May 2013.

    Following a month-long investigation, police yesterday (Monday 10 June 2013) charged a 21-year-old man after he appeared in Central Local Court on other matters.

    In May, U.S. federal prosecutors in New York described Liberty Reserve as a criminal enterprise that had laundered $6 billion for various subgroups of scammers and criminals.

    Charged criminally in the United States last month were alleged Liberty Reserve co-conspirators Arthur Budovsky; Vladimir Kats, also known as “Ragnar”; Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; Mark Marmilev, also known as “Marko” and “Mark Halls”; and Maxim Chukharev.

    The New South Wales Police Force did not specifically reference Liberty Reserve in its release announcing the arrest of the 21-year-old. Rather, the agency described it as a “Costa Rica-based currency transfer and payment-processing company” that “was shut down by an overseas government last month.”

    Liberty Reserve was tied in the U.S. indictment to the crimes of  “credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”

  • UPDATE: 2 Liberty Reserve Figures Jailed In New York; 1 Of Them Has Lawyer Experienced In Mob Cases

    recommendedreading1Two defendants in the alleged $6 billion Liberty Reserve money-laundering conspiracy are listed as inmates at the Metropolitan Correctional Center (MCC) in New York. They are Vladimir Kats, also known as “Ragnar,” and Mark Marmilev, also known as “Marko” and “Mark Halls.”

    Kats is 41; Marmilev is 33. Their release dates are listed as “unknown.” Filings in the case show that both men are jailed by “consent” and have reserved their rights to apply for bail later.

    Attorney James R. Froccaro Jr. has entered an appearance notice for Marmilev. Froccaro previously has represented clients implicated in schemes involving organized-crime figures. He also has represented clients caught up in bizarre and incongruous crimes, such as the case of Dr. Felix Lanting, an 85-year-old physician accused of running a pill mill on Staten Island.

    From SILive on Jan. 13, 2013 (italics added):

    Prosecutors said Dr. Lanting wrote a staggering 3,029 oxycodone prescriptions for various patients through his private practice over more than six months that year. He sold the scripts, at an average of $200 each, to patients who didn’t need them, with the help of “bouncers” to keep recipients in line.

    Three of the so-called bouncers — all with criminal records — often worked out deals with their own “patients” to get oxycodone pills, which they allegedly sold for $10 to $15 on the street.

    Marmilev, who was arrrested last week in Brooklyn, was described by prosecutors as a designer of Liberty Reserve’s technological infrastructure. Liberty Reserve was described as a criminal enterprise.

    Liberty Reserve founder Arthur Budovsky was arrested last week in Spain. Seven individuals with ties to Liberty Reserve have been charged criminally. The others include Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; and Maxim Chukharev.

     

     

  • URGENT >> BULLETIN >> MOVING: Liberty Reserve, Founder, Others Indicted In New York

    breakingnews72URGENT >> BULLETIN >> MOVING: (15TH UPDATE 2:31 P.M. EDT U.S.A.) Liberty Reserve, its founder and several others have been indicted in U.S. District Court for the Southern District of New York (Manhattan).

    The charges, which include conspiracy to commit money-laundering, conspiracy to operate an unlicensed money-transmitting business and operating an unlicensed money-transmitting business, were confirmed this morning by the office of U.S. Attorney Preet Bharara.

    Liberty Reserve founder Arthur Budovsky was using the aliases “Eric Paltz” and “Arthur Belanchuk,” according to the indictment.

    Co-conspirators, according to the indictment, include Vladimir Kats, also known as “Ragnar”; Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; Mark Marmilev, also known as “Marko”; and Maxim Chukharev.

    Marmilev also is known as “Mark Halls,” according to an affidavit that accompanies the indictment.

    Budovsky and El Amine were arrested Friday in Spain, Bharara’s office said today. Kats and Marmilev were arrested Friday in Brooklyn. Chukharev was arrested Friday in Costa Rica. Hildago and Abdelghani are “at large” in Costa Rica.

    “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,” Bharara said. “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.”

    Added Steven G. Hughes, special agent in charge of the U.S. Secret Service. “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.”

    The IRS and the U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)) also are involved in the probe, as are multiple nations, Bharara’s office said.

    Liberty Reserve and its co-conspirators “intentionally created, structured, and operated Liberty Reserve as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,” according to the indictment.

    The United States has seized the Liberty Reserve domain name along with several others, according to an affidavit that accompanies the indictment. The others include: ExchangeZone.com; SwiftExchanger.com; MoneyCentralMarket.com; and Asianagold.com. As part of the seizure process, a federal judge ordered the U.S. Secret Service to point the domain nameservers to a “sinkhole” URL at ShadowServer.org.

    News about the seizures destroys various examples of wishful thinking advanced by online HYIP hucksters at forums such as TalkGold and MoneyMakerGroup since LibertyReserve’s domain went offline Friday. On Saturday, reports surfaced that Budovsky had been arrested in Spain and that Liberty Reserve was under investigation in Costa Rica and the United States.

    Seizure notices are expected to appear on the domains, although the timing was not clear.

    The indictment ties Liberty Reserve to the crimes of “credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”

    Among other things, the indictment alleges that “virtually all of Liberty Reserve’s business derived from suspected criminal activity” and that the scope of the fraud is “staggering.”

    Between 2006 and May 2013, according to the indictment, Liberty Reserve processed an estimated 55 million transactions and is believed “to have laundered more than $6 billion in criminal proceeds.”

    Supporting affidavits in the case show that the indictment was returned under seal on May 20 and that prosecutors applied for an injunction barring Amazon Web Services Inc. from providing services to Liberty Reserve. The affidavit also shows that the United States is seeking forfeiture of sums on deposit in at least 42 accounts in various countries

    These banks are in countries such as Costa Rica, Cyprus, Russia, Hong Kong, China, Morocco, Spain, Latvia, Australia and the United States. Tens of millions of dollars are being sought in forfeiture actions, although the final sum is unclear.

    Liberty Reserve, according to the indictment, used “exchangers” in countries with little oversight, including Malaysia, Russia, Nigeria and Vietnam. The process was part of a criminal scheme to bury evidence of fraud while providing anonymity for the fraudsters.

    The enterprise, according to the indictment, functioned “in effect as the bank of choice for the criminal underworld.”

    Link to documents posted by Bharara’s office. Read statement by Bharara’s office.

    In a separate but related action, the U.S. Department of the Treasury announced it had identified Liberty Reserve as a “Financial Institution of Primary Money Laundering Concern.”

    “Treasury is determined to protect the U.S. financial system from cyber criminals and other malicious actors in cyberspace, including overseas entities like Liberty Reserve that facilitate online crime and hope to evade regulatory scrutiny,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “We are prepared to target and disrupt illicit financial activity wherever it occurs – domestically, at the far reaches of the globe or across the internet.”