• Sweden's news in English
 
app_header_v3

Swedish raid in 'record' Liberty Reserve probe

30 May 2013, 14:54

Published: 30 May 2013 14:54 GMT+02:00

"I'm the one who's authorized the raid," district prosecutor Ylva Johansson at the International Prosecution office confirmed for The Local.

"We don't have any information on the actual confiscated material as it's an American investigation, not a Swedish one."

The raid was carried out in the Stockholm area last Friday, resulting in the confiscation of a number of servers suspected of playing a role in moving billions of dollars in digital currency around the world.

A Swedish man admitted that he had served as a middle-man in Liberty Reserve's network for three years.

"It was obviously a system that could be used for money laundering," the man, who wished to remain anonymous, told the Dagens Nyheter (DN) newspaper.

Prosecutors in the United States unsealed an indictment on Tuesday, alleging the operators of Liberty Reserve were behind a $6-billion criminal money laundering scheme US authorities labelled "the largest international money laundering prosecution in history".

"As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes – the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers," US Attorney Preet Bharara said in a statement.

Founded in Costa Rica in 2006, Liberty Reserve ran a digital currency trading system that boasted over one million users who could transfer money by submitting only a name, e-mail address, and birth date.

Deposits could also be made via third-parties using credit cards, with the deposits then "converted" to Liberty Reserve Dollars or Liberty Reserve Euros, virtual currencies with values tied to actual US dollars or euros.

"Liberty Reserve operated, on an enormous scale, a digital currency system designed to provide cyber and other criminals with a way to launder their profits without leaving a trace," Acting US Assistant Attorney General Mythili Raman said in a statement.

"The company’s very purpose was to launder its users’ criminal proceeds through the US and global financial system."

The Swedish man explained to DN that he handled money transfer requests online from his home and that the most common clients were people who wanted to transfer small sums of money abroad as part of fraudulent Ponzi schemes.

"They were regular Svenssons who wanted to be rich," he explained, adding that Swedes were able to deposit money in his bank account and that he earned a commission for using their money to buy Liberty Reserve digital currency.

Story continues below…

The man has previously been investigated by Swedish tax authorities for his virtual currency exchange operations, which have since been shut down.

He admitted to DN that he "knew full well" that Liberty Reserve's service was used for money laundering.

Sanna Håkansson/David Landes

Follow The Local on Twitter

Your comments about this article

Today's headlines
Drunken Christmas goat burner risks four years in jail
The Christmas goat looks at the fireworks and contemplates its future. Photo: Mats Åstrand/TT

His singed eyebrows were a dead giveaway.

Joe Biden: 'Sweden has shown great leadership'
Joe Biden, left, and Stefan Löfven. Photo: Anders Wiklund/TT

US Vice President Joe Biden praised Sweden for "punching way above its weight" in the global refugee crisis.

Nepal's Sherpas rebuild Swedish mountain paths
Kebnekaise, Sweden's highest mountain. Photo: Stockholms Universitet

Nepalese sherpas have been called in to improve hillwalking safety on Sweden's highest mountain Kebnekaise.

23 people tricked into renting the same Malmö apartment
Sweden's housing market is notoriously tricky. Photo: Janerik Henriksson/TT

"I have never felt so stupid and so conned."

Sweden on standby to help earthquake-hit Italy
Rescue workers search through the debris. Photo: AP Photo/Sandro Perozzi

Swedish authorities are ready, if asked, to quickly assist Italy as it recovers from a deadly earthquake.

We harmed Sweden's teachers and should apologize: prof
A tired pupil at a school in Stockholm. Photo: Jessica Gow/TT

"The situation is very worrying," says Professor Jonas Linderoth.

US keeper kicked off team for calling Swedes cowards
Hope Solo made her comments after Sweden knocked the US team out of the Olympics. Photo: Eugenio Savio/AP

The US team will be Hope-less for six months.

Five must-see cultural events in Sweden this weekend
Like The Bridge? You'll love one of the events we've picked out for this weekend. Photo: Erland Vinberg/TT

The summer is almost over but Sweden saved the best for last with these cultural events this weekend – including one that will make The Bridge fans happy.

Was there a secret plot to kill Swedish ex-UN chief?
Dag Hammarskjöld, the UN's Secretary General, pictured months before his death in 1961. Photo: TT

Ban Ki-moon wants to find out.

Joe Biden to arrive in Sweden for refugee talks
Stefan Löfven meets Joe Biden during a visit to Washington in March 2015. Photo: Monica Enqvist/Government Offices of Sweden

US Vice President Joe Biden will arrive in Stockholm on Wednesday evening ahead of talks with Swedish Prime Minister Stefan Löfven that are expected to focus on migration and refugees.

Sponsored Article
Malmö to host global skateboard championship
Gallery
People-watching: August 24th
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
The Local Voices
'I want to be a businesswoman but I don’t care about money'
National
Experts: Gothenburg grenade blast is 'part of a cycle of violence'
Blog updates

23 August

A Summer in Sweden (The Diplomatic Dispatch) »

"For our first year here in Sweden we decided to have all our holidays in Sweden.…" READ »

 

22 July

After the horror, carry on regardless (Globally Local) »

"This time last week, we were just digesting the horror of the Nice killings, in which…" READ »

 
 
 
Sponsored Article
The mystique of Asia - in the middle of Stockholm
Gallery
Property of the week: Karlsborg
Sponsored Article
Why you should learn to trade (and just how easy it is)
National
Why Sweden could change its criticised detention laws
National
Watch this dog's reaction when she tries Swedish fermented herring
Gallery
People-watching: August 19th-21st
Sponsored Article
6 reasons expats use TransferWise to send money
National
How to find student housing in Sweden
Sponsored Article
'Sweden's Lauryn Hill' touches the country's musical soul
National
VIDEO: Swede films first Northern Lights of the season
Gallery
People-watching: August 17th
Sponsored Article
6 simple travel hacks that will make your life easier
Society
Swedish population nears ten million
Sponsored Article
Why expats choose international health insurance
The Local Voices
This Syrian artist found love in a Swedish library
National
Sex pigs halt traffic after laser attack on Pokémon teens. Only in Sweden.
Sponsored Article
Five easy ways to travel more often
Gallery
Property of the week: Hammarby Sjöstad, Stockholm
Sponsored Article
Why you should attend an international job fair
Society
Drunk knight detained in Stockholm
Sponsored Article
Five things Americans should know about voting abroad
National
Can you solve this Swede's strange Star Wars mystery?
Gallery
People-watching: August 12th-14th
Sponsored Article
Jordan: where history meets adventure
National
Swedes cheer first snow of the season
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Gallery
People-watching: August 10th
Sponsored Article
Jordan Pass: your ticket to the experience of a lifetime
The Local Voices
Syrian presenter: Swedish media should make more shows in Arabic
Sponsored Article
Why Jordan is the ‘Different’ East
Travel
Watch the meteor shower in Sweden
Sponsored Article
6 simple travel hacks that will make your life easier
Lifestyle
How to survive a crayfish party
Gallery
IN PICS: Your Sweden summer snaps
The Local Voices
Gabriel mastered Swedish and got accepted onto a medicine degree in just 7 months
3,361
jobs available