$6 Billion Cyber Money Laundering Revealed

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Online currency exchange, Liberty Reserve, is accused in laundering $6 billion. It is a central hub for criminals trafficking in everything from stolen identities to child pornography, federal prosecutors in New York said.

According to Preet Bharara, the United States attorney in Manhattan, and other law enforcement officials, it is the largest online money-laundering case in history. The cyber money-laundering scheme included 1 million users worldwide, with more than 200,000 users in the US. Over seven years, 55 million transactions were conducted through Liberty Reserve, the prosecutors said.

From 2006 to 2013, Liberty Reserve became one of the world’s most widely used digital currency services but it appeared to be a “financial hub of the cybercrime world”. The profits from criminal activities were processed anonymously and ranged from identity theft and credit card fraud to computer hacking, investment fraud, child pornography, and drug trafficking.

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FBI – Frauds From A to Z

The FBI has just recently released a revised list of frauds on their web page entitled: Frauds From A to Z.  The topics covered range from Adoption Scams and Credit Card Fraud to Insurance and Internet Fraud.  For most categories, the FBI website provides both an overview of the fraud itself and tips for how to avoid being caught up in the fraud.

EXAMPLE:  Lottery Fraud

If it sounds too good to be true, it usually is a fraud.  Americans are defrauded out of $120 million annually in Lottery Scams.

Here are a few examples of how the schemes work:

  • You receive a call, an e-mail, or a letter telling you that you’ve won a large sum of money in a foreign lottery you don’t remember entering. To claim your “winnings,” you’ll have to provide your bank account number so your winnings may be deposited into your account.
  • You’re told you’ve won a sizable lottery and are asked to wire a few thousand dollars to a “customs agent” to cover duties and taxes. But after wiring the money, you’re contacted again and told you must send even more money to collect your prize.
  • You receive a congratulatory letter in the mail along with a check for $5,000. You’re instructed to cash the check, then wire a portion of the funds to a foreign address to cover taxes and fees, keeping the remaining money as your “lottery winnings.” A few days after doing so, your bank notifies you that the check was counterfeit and you now must repay it the $5,000.