Money-laundering accused Budovsky says FBI wanted source code

PUBLISHED : Tuesday, 28 January, 2014, 10:22pm
UPDATED : Wednesday, 29 January, 2014, 3:31am

The man accused of being behind one of the world's biggest money-laundering businesses said he was arrested after refusing to disclose technical details of his online operation to the FBI.

Liberty Reserve founder Arthur Budovsky, 40, was speaking at a court in Madrid on Monday, nine months after he was detained on US charges. He was intercepted on his way home to Costa Rica, where he was living after renouncing US citizenship.

US officials accuse Budovsky of using Liberty Reserve, a currency transfer and payment processing company based in the Central American country, as a kind of underworld bank which handled some US$6 billion of illicit transactions.

Answering questions from his lawyer, Gonzalo Boye, Budovsky acknowledged founding Liberty Reserve in 2006, but said he sold his share in the business the following year and was kept on only as a consultant.

Budovsky said he was the victim of a witch-hunt which began in 2011, when the FBI asked him for the source code for Liberty Reserve. Budovsky suggested US authorities wanted to use it to undermine the business.

"I refused. It's like asking Coca-Cola for their secret formula," he told the extradition hearing. "The truth is that the US wants to protect its monopoly on financial transfer platforms."

Budovsky said the confiscation of Liberty Reserve's servers allowed the US to access financial information on 800,000 users and 44 million transactions.