8 ms·

Bank of the Underworld (2015)

62 points by axiomdata316 7y ago

zipwitch 7y ago
>Prosecutors dismissed the idea that many legitimate businesses used Liberty Reserve. After the takedown, they noted, users were encouraged to contact the U.S. Attorney’s Office in Manhattan if they wanted their money back. According to prosecutors, only 35 people did so. Was that because only 35 users were legitimate, or because the users - even if completely legitimate - were reluctant to risk potentially destroying their lives by admitting their identities to federal investigators?
- cascom 7y ago
  Additionally size of average account would matter, I don’t see people wading into those waters over $50 or probably even $200
- CamelCaseName 7y ago
  I was not even aware this was possible. My loss from the LR takedown was ~$600 and this is the first time I ever heard that any such recourse that was available. In my personal experience, LR was easier to use and more widely accepted at the time than competing services. (namely PayPal) This article focused a lot on the carding scene, which no doubt was heavily reliant on LR, but to paint all 1MM+ users of LR as carders is simply incorrect. As the article mentions, it was trivial to open an account (as easy as signing up for HN really) and many would do so to make a one-off payment.
thefounder 7y ago
So long with the right to a lawyer and a fair trial. >> According to Stapert, the U.S. government requested that he forfeit his fees for the case—insisting that the money Budovsky had paid him was tainted—a move that forced him to drop Budovsky as a client. (The Manhattan U.S. Attorney’s Office denies that the government petitioned Stapert to forfeit the fees.) Once on U.S. soil, Budovsky was assigned a court-appointed lawyer;
- mpiedrav 7y ago
  Once a case is big enough for improving the reputation of prosecutors and institutions involved, they will go to any length to make it happen. Challenging the US justice system in matters of legal (and even human) rights, more often than not, leads to dead ends.
0xdeadb00f 7y ago
> An agent tried opening an account with the name “Joe Bogus” and an address of “123 Fake Main Street” in “Completely Made Up City.” The agent also named the account “ToStealEverything” and wrote that it would be used for “shady things.” He encountered no problems, and the account was soon functional. One must assume registration was automated at this point, no? There's no shady business practice in this specifically.
- CamelCaseName 7y ago
  The issue is that financial systems are regulated and opening an account usually requires an AML / KYC process that ties you users to a personal ID.
  - 0xdeadb00f 7y ago
    Ah! That's what I was missing. KYC
blotter_paper 7y ago
>The target was a Vietnamese man named Hieu Minh Ngo. Investigators believed he was a big-time identity thief who sold packages of data known as “fullz,” each of which typically included a person’s name, date of birth, mother’s maiden name, Social Security number, and e-mail address and password. Criminals could buy fullz from Ngo for as little as eight cents and then use them to open credit cards, take out loans, or file for bogus tax refunds. [...] He had allowed nearly 1,400 criminals to access a database containing the personal information of 200 million U.S. citizens—almost two-thirds of the population. If two thirds of Americans have had all of that information compromised from this one incident alone, why do we use it as authentication for anything? Shouldn't the SSN be replaced/assisted by a key pair?
- simplicio 7y ago
  I always thought the Gov't should just publish everyones SSN. That would prevent institutions from trying to use them as psuedo-passwords, while making them more useful for their actual purpose of providing a unique identifier for individuals.
  - Qwertystop 7y ago
    Problem: Too many places already use them as pseudo-passwords, and no amount of forewarning would stop at least some of them from not moving away from that in time.
- pjc50 7y ago
  Americans are dead-set against having a working national ID system. There are even people who are upset about the mere existence of the SSN for weird religious reasons. The British situation is even worse - proof of right of residence is required for opening a bank account, working, or renting a home, but only immigrants are made to have ID cards. Also utility bills are a valid proof of address for some reason. No, the real problem is a liability one; loan companies should be held liable for each instance of fraud where they pursue the wrong person.
  - ed312 7y ago
varshithr 7y ago
I was wondering, does it make sense for "Underworld" to adopt something similar to Facebook's Libra? Seems like a perfect fit and transaction cost would be worth it.
- hummel 7y ago
  They already did, it's called bitcoin
  - SuoDuanDao 7y ago
    Monero actually. Bitcoin is traceable.
    - 0xdeadb00f 7y ago
      Yes. It's usually converted back/forth between those two though, as Bitcoin is sometimes the only one accepted.
hummel 7y ago
Absynthe/Master Splynter was an undercover agent at those times.
partisan 7y ago
> First of all, for thouse who [have] big money [stuck] in LR, dont be anxious … thinking about the possibility to loose your money. Thats will cause unnecessary pain. Give a good kiss your wife/girlfriend or your son if you have. Give a time for your mind. Live your life whatever be the future of this money … If still thinking that you have no where to run: IF we lost, (I said IF, we have nothing concrete yet) we lost a place to KEEP money, not the way to MAKE money. Keep that in mind. The show MUST GO on.
Ceezy 7y ago
>Budovsky insists he didn’t marry Vargas simply to get Costa Rican citizenship, which would have been illegal. Theirs was a personal relationship, he told me, without elaboration. Lol! I m not really how they gross 200 M USD in transactions at 1% and he is found with 2.5 M USD in his debit card.
stevespang 7y ago
Another PAYWALLED site.
brookhaven_dude 7y ago
No John Wick reference? So disappointed...
raintrees 7y ago
As the article states, Western Union is used frequently for transactions with assets that may have been gained through illegal activity (as judged per various government measurements/perspective). And the USD is likely the greatest instrument by volume of the same types of transactions. The transaction business will continue, as humans continue to trade for benefit. The cat and mouse game seems mostly about "authorities" overseeing and/or obtaining their share. Again, an opportunity for p2p distributed, anonymous, and encrypted technology to allow humans to continue to trade that which they value. Currency/money is based on trust/faith, so that would be the logical focal point. Hypothetically, such development work would likely need to be conducted in jurisdictions that owe no allegiance to those authorities that do not wish for it to occur. Flavors of Cryptonomicon... Fascinating.
parliament32 7y ago
He ended up being sentenced to 20 years: https://www.justice.gov/usao-sdny/pr/liberty-reserve-founder-arthur-budovsky-sentenced-manhattan-federal-court-20-years https://www.justice.gov/usao-sdny/pr/liberty-reserve-founder...

62 points by axiomdata316 7y ago

>Prosecutors dismissed the idea that many legitimate businesses used Liberty Reserve. After the takedown, they noted, users were encouraged to contact the U.S. Attorney’s Office in Manhattan if they wanted their money back. According to prosecutors, only 35 people did so. Was that because only 35 users were legitimate, or because the users - even if completely legitimate - were reluctant to risk potentially destroying their lives by admitting their identities to federal investigators?

cascom 7y ago
Additionally size of average account would matter, I don’t see people wading into those waters over $50 or probably even $200
CamelCaseName 7y ago
I was not even aware this was possible. My loss from the LR takedown was ~$600 and this is the first time I ever heard that any such recourse that was available. In my personal experience, LR was easier to use and more widely accepted at the time than competing services. (namely PayPal) This article focused a lot on the carding scene, which no doubt was heavily reliant on LR, but to paint all 1MM+ users of LR as carders is simply incorrect. As the article mentions, it was trivial to open an account (as easy as signing up for HN really) and many would do so to make a one-off payment.

thefounder 7y ago

So long with the right to a lawyer and a fair trial. >> According to Stapert, the U.S. government requested that he forfeit his fees for the case—insisting that the money Budovsky had paid him was tainted—a move that forced him to drop Budovsky as a client. (The Manhattan U.S. Attorney’s Office denies that the government petitioned Stapert to forfeit the fees.) Once on U.S. soil, Budovsky was assigned a court-appointed lawyer;

mpiedrav 7y ago
Once a case is big enough for improving the reputation of prosecutors and institutions involved, they will go to any length to make it happen. Challenging the US justice system in matters of legal (and even human) rights, more often than not, leads to dead ends.

0xdeadb00f 7y ago

> An agent tried opening an account with the name “Joe Bogus” and an address of “123 Fake Main Street” in “Completely Made Up City.” The agent also named the account “ToStealEverything” and wrote that it would be used for “shady things.” He encountered no problems, and the account was soon functional. One must assume registration was automated at this point, no? There's no shady business practice in this specifically.

CamelCaseName 7y ago
The issue is that financial systems are regulated and opening an account usually requires an AML / KYC process that ties you users to a personal ID.
- 0xdeadb00f 7y ago
  Ah! That's what I was missing. KYC

blotter_paper 7y ago

>The target was a Vietnamese man named Hieu Minh Ngo. Investigators believed he was a big-time identity thief who sold packages of data known as “fullz,” each of which typically included a person’s name, date of birth, mother’s maiden name, Social Security number, and e-mail address and password. Criminals could buy fullz from Ngo for as little as eight cents and then use them to open credit cards, take out loans, or file for bogus tax refunds. [...] He had allowed nearly 1,400 criminals to access a database containing the personal information of 200 million U.S. citizens—almost two-thirds of the population. If two thirds of Americans have had all of that information compromised from this one incident alone, why do we use it as authentication for anything? Shouldn't the SSN be replaced/assisted by a key pair?

simplicio 7y ago
I always thought the Gov't should just publish everyones SSN. That would prevent institutions from trying to use them as psuedo-passwords, while making them more useful for their actual purpose of providing a unique identifier for individuals.
- Qwertystop 7y ago
  Problem: Too many places already use them as pseudo-passwords, and no amount of forewarning would stop at least some of them from not moving away from that in time.
pjc50 7y ago
Americans are dead-set against having a working national ID system. There are even people who are upset about the mere existence of the SSN for weird religious reasons. The British situation is even worse - proof of right of residence is required for opening a bank account, working, or renting a home, but only immigrants are made to have ID cards. Also utility bills are a valid proof of address for some reason. No, the real problem is a liability one; loan companies should be held liable for each instance of fraud where they pursue the wrong person.
- ed312 7y ago

varshithr 7y ago

I was wondering, does it make sense for "Underworld" to adopt something similar to Facebook's Libra? Seems like a perfect fit and transaction cost would be worth it.

hummel 7y ago
They already did, it's called bitcoin
- SuoDuanDao 7y ago
  Monero actually. Bitcoin is traceable.
  - 0xdeadb00f 7y ago
    Yes. It's usually converted back/forth between those two though, as Bitcoin is sometimes the only one accepted.

hummel 7y ago

Absynthe/Master Splynter was an undercover agent at those times.

partisan 7y ago

> First of all, for thouse who [have] big money [stuck] in LR, dont be anxious … thinking about the possibility to loose your money. Thats will cause unnecessary pain. Give a good kiss your wife/girlfriend or your son if you have. Give a time for your mind. Live your life whatever be the future of this money … If still thinking that you have no where to run: IF we lost, (I said IF, we have nothing concrete yet) we lost a place to KEEP money, not the way to MAKE money. Keep that in mind. The show MUST GO on.

Ceezy 7y ago

>Budovsky insists he didn’t marry Vargas simply to get Costa Rican citizenship, which would have been illegal. Theirs was a personal relationship, he told me, without elaboration. Lol! I m not really how they gross 200 M USD in transactions at 1% and he is found with 2.5 M USD in his debit card.

stevespang 7y ago

Another PAYWALLED site.

brookhaven_dude 7y ago

No John Wick reference? So disappointed...

raintrees 7y ago

As the article states, Western Union is used frequently for transactions with assets that may have been gained through illegal activity (as judged per various government measurements/perspective). And the USD is likely the greatest instrument by volume of the same types of transactions. The transaction business will continue, as humans continue to trade for benefit. The cat and mouse game seems mostly about "authorities" overseeing and/or obtaining their share. Again, an opportunity for p2p distributed, anonymous, and encrypted technology to allow humans to continue to trade that which they value. Currency/money is based on trust/faith, so that would be the logical focal point. Hypothetically, such development work would likely need to be conducted in jurisdictions that owe no allegiance to those authorities that do not wish for it to occur. Flavors of Cryptonomicon... Fascinating.

parliament32 7y ago

He ended up being sentenced to 20 years: https://www.justice.gov/usao-sdny/pr/liberty-reserve-founder-arthur-budovsky-sentenced-manhattan-federal-court-20-years https://www.justice.gov/usao-sdny/pr/liberty-reserve-founder...