by Scott Creighton
- HSBC failed to monitor $670 billion in wire transfers and $9.4 billion in cash
- (Wachovia) sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn
- Historians estimate that in the 1920s, 99 of every 100 Franklin County residents were in some way involved in the illegal liquor trade. The bootleggers became involved with gangsters from Chicago and other major cities, and some local law enforcement officials (and especially federal agents) were part of the criminal activities and killing of competitors
The charges are that throughout it’s history (Liberty Reserve was set up in 2006 by Arthur Budovsky in Costa Rica after the feds shut down his other exchange GoldAge) Liberty Reserve did around $6 billion in transactions, all of which they now add together to get the total amount of “laundered money” (read the court documents, here)
“Overall, from 2006 to 2013, Liberty Reserve processed an estimated 55 million separate financial transactions and is believed to have laundered more than 6 billion (U.S.) in criminal proceeds” U.S. V Liberty Reserve et al Indictment, page 4
The indictment states that by the end, Liberty Reserve was doing 1.5 billion in transactions a year. They certainly didn’t start off that way, it took time to build up to that amount of traffic. They were operating for 6 or 7 years, so it’s reasonable to assume the $6 billion number is their total transaction amount over the entire course of their business operation.
Part of the magic trick that Justice uses is the start off with the premise that the business was set up to cater to illegal transactions and those who wish to launder their ill-gotten gains so to speak. Think of it as a poor man’s Swiss bank account. Therefore they are claiming that all of those 55 million transactions were criminal transactions.
“Because virtually all of Liberty Reserve’s business derived from suspected criminal activity, the scope of the defendant’s unlawful conduct is staggering” U.S. V Liberty Reserve et al Indictment, page 3
This is an obvious fallacy.
So why pump this case up and why prosecute these men when other drug laundering schemes are so much larger? The answer to that lies in the standard operation procedure of the Justice Department these days: protect the big banks at all costs, especially from competition. Especially from homegrown competition.