Malaysia Police Track ‘Money Trail’ in US Fraud Probe

KUALA LUMPUR – Malaysian police have been cooperating with authorities abroad to stem a global online currency operator that is being probed in the US on allegations of massive money laundering, a report said Thursday.

The United States on Tuesday unveiled the world’s “largest” money laundering investigation, targeting the digital currency business Liberty Reserve.

The Costa Rica-based entity, which handled huge amounts of money outside the control of national governments, is charged with running a “$6 billion money laundering scheme and operating an unlicensed money transmitting business.”

New York prosecutors said Liberty Reserve used “pre-approved” exchangers, typically unlicensed money-transmitting businesses “operating in countries without significant governmental money laundering oversight or regulation, such as in Malaysia, Russia, Nigeria, and Vietnam.”

Malaysian police and the nation’s central bank have been monitoring the operation for two years, Fuzi Harun, a senior police official, said according to The Star daily.

“We are aware of the illegal operation, which also uses unlicensed money exchangers to avoid any paper trail,” he was quoted as saying.

“It is hard to gather credible evidence on such trans-border crime… However, we have been tracking the money trail,” he said, adding investigations were ongoing and authorities were in touch with their foreign counterparts.

The police and central bank officials could not immediately be reached for confirmation.

Liberty Reserve is accused of having processed at least 55 million illegal transactions for at least one million users “and facilitated global criminal conduct.”

The probe involves law enforcement in 17 countries and “is believed to be the largest money laundering prosecution in history,” the US Attorney’s office for New York has said.

Liberty Reserve’s principals were arrested Friday in a round-up launched simultaneously in Costa Rica, Spain and New York, sealing the fate of a company that had been one of the most successful in the popular but increasingly scrutinised world of unofficial banking and virtual currencies.

Related: $6 Billion US Fraud Probe Targets Digital Currency