The co-founder and operator of Liberty Reserve, a widely-used digital currency, was yesterday sentenced to 20 years in prison for conspiring to help cyber criminals launder hundreds of millions of dollars using its services.
Arthur Budovsky, 42, was sentenced by US District Judge Denise Cote in Manhattan, who said the crime of unprecedented scope called for a substantial punishment.
"Sad to say, Mr. Budovsky used his enormous talents here in a way that led to widespread harm," she said.
Budovsky, who pleaded guilty in January to conspiracy to commit money laundering, was also ordered to forfeit $122 million and fined $500,000. Budovsky said nothing, but his lawyer argued for less than 15 years in prison.
"Remorse has been exhibited here," he said.
However, assistant US attorney Christian Everdell pressed for the maximum 20-year sentence in view of Budovsky's role "at the helm of this sweeping enterprise."
Liberty Reserve operated a widely-used digital currency, processing over $8 billion in financial transactions which earned Budovsky over $25 million, according to prosecutors.
They added, the business was linked with criminals seeking to launder proceeds from Ponzi schemes, credit card trafficking, identity thefts and computer hacking.
Liberty Reserve co-founder Vladimir Kats and three others also pleaded guilty. Kats would be sentenced next week.
Budovsky ran the digital money business out of Costa Rica.
For seven years starting in 2006, Liberty Reserve's website could be used by anyone to transfer money with minimal oversight. Users only needed to give their name, e-mail address, and birthday. Banks, normally worked under stricter rules to avoid channeling criminal funds.
According to a federal indictment, Liberty Reserve, during the height of its operations, had over 1 million customers worldwide, including 200,000 in the US and handled 12 million financial transactions a year.
The scale of its operations caught the eye of authorities, who, in the post-9/11 world, were keen to keep track of every dollar to avoid it ending up funding terrorists.