WASHINGTON, May 7 (UPI) -- The U.S. Department of Justice announced the founder of Liberty Reserve online currency was sentenced to 20 years in prison for money laundering.
In January, Arthur Budovsky, 42, pleaded guilty to running a massive money laundering enterprise through his virtual currency company Liberty Reserve, which acted as a "shadow banking system" for criminals, the Justice Department said.
Assistant Attorney General Leslie R. Caldwell announced Budovsky's 20 year sentence as the founder of the company on Friday.
"The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime," Caldwell said. "Together with our American and international law enforcement partners, we will protect the public even when criminals use modern technology to break the law."
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Budovsky and six others were indicted by U.S. prosecutors in 2013 for operating the $6 billion-a-year money laundering operation.
Liberty Reserve was incorporated in Costa Rica in 2006 and "provided its users with what it described as 'instant, real-time currency for international business.' "
By 2013 the service had more than 5.5 million user accounts worldwide and became a hub for cybercriminals, who used it for trafficking the criminal proceeds of Ponzi schemes, credit card trafficking, stolen identity information and computer hacking.
"Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe," Manhattan U.S. Attorney Bharara said. "Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws."
Four of Budovsky's codefendants have pleaded guilty. Mark Marmilev and Maxim Chukharev were sentenced to five and three years in prison respectively. U.S. District Judge Denise L. Cote is expected to sentence Vladimir Kats and Azzeddine El Amine on May 13.
