May 2013, LIBERTY RESERVE processed an estimated 55 million separate financial transactions and is believed to have laundered more than $6 billion in criminal proceeds.
THE FOUNDING OF LIBERTY RESERVE
11. LIBERTY RESERVE, as currently constituted, was born out of the defendants’ unsuccessful experience running a third-party exchange service for another digital currency. Specifically, in or about 2005, ARTHUR BUDOVSKY, a/k/a "Arthur Belanchuk," a/k/a "Eric Paltz," and VLADIMIR KATS, a/k/a "Ragnar," the defendants, operated a company called "Gold Age, Inc.," which functioned as an "exchanger" for "E-Gold," then the most popular digital currency in operation. However, in December 2006, BUDOSVKY and KATS were convicted in New York state of operating "Gold Age, Inc." as an unlicensed money transmitting business. At or about the same time, E-Gold and several of its principals were charged with various offenses including money laundering.
12. In the wake of his Criminal conviction, ARTHUR BUDOVSKY, a/k/a "Arthur Belanchuk," a/k/a "Eric Paltz," the defendant, set about building a digital currency that would succeed in eluding law enforcement where E-Gold had failed, by, among other ways, locating the business outside the United states. Accordingly, BUDOVSKY emigrated to Costa Rica, where in 2006, he and AHMED YASSINE ABDELGHANI. a/k/a "Alex," the
