Business

Liberty Reserve: Barclays aiding money-laundering probe

Domain seizure
Image caption Liberty Reserve used 45 bank accounts around the world to transfer money

One of the accounts belonging to seized digital money service Liberty Reserve was held by UK bank Barclays in Spain.

Liberty Reserve also had 17 bank accounts in Cyprus, papers filed by the US Department of Justice show.

The BBC understands that the bank is not accused of any wrongdoing by the authorities.

US authorities have accused Liberty Reserve of laundering more than $6bn (£4bn) in criminal cash.

"Barclays can confirm it is co-operating with the investigation, following the notification it received from the authorities," a spokesman for the bank said on Sunday.

The Barclays account was in the name of Liberty Reserve founder Arthur Budovsky, the court documents said. Mr Budovsky opened the Spanish personal account in 2009, the BBC has learned.

The DOJ has called Liberty Reserve the "largest international money-laundering prosecution in history", alleging that seven people involved in running the operation set up the digital cash service as a "criminal business venture" designed specifically to "help criminals conduct illegal transactions and launder the proceeds of their crimes".

'Transform'

Barclays' current chief executive, Antony Jenkins, has pledged to clean up the bank's image under his "Transform" programme.

Last June the bank was fined £290m by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.

The scandal led to the resignations of three Barclays senior board members, including the chief executive Bob Diamond. He was replaced by Mr Jenkins, who had been head of retail and business banking.

The tiny island of Cyprus was bailed out earlier this year, securing a loan package worth 10bn euros (£8.4bn; $13bn) from its EU partners and the International Monetary Fund.

In return, it must raise 13bn euros, largely through banking reform.

The tough conditions were imposed on the island due to the size of its bloated banking sector. Many eurozone members believed that Cyprus had become a haven for tax evasion and money laundering.

In total, the DOJ said that 45 bank accounts used by Liberty Reserve have been seized and action has been taken to take over the assets of 35 other sites that fed funds to Liberty Reserve for laundering.

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