LARRY NEUMEISTER
Associated Press
NEW YORK (AP) — The Costa Rican founder of payment processing company Liberty Reserve made his first appearance in a U.S. courtroom Tuesday, pleading not guilty to charges that his online bank laundered billions of dollars for criminals.
Arthur Budovsky, 40, entered the plea in Manhattan federal court. He was extradited Friday from Spain, where he had been held since his May arrest.
U.S. District Denise Cote set a Sept. 21 trial date and Budovsky was returned to prison. He did not request bail.
Defense attorney Steven Frankel said the government seemed to be exaggerating the dimensions of the case. He noted that co-defendants have pleaded guilty to lesser charges, including failing to properly register their business.
“When you see a bomb of an indictment and look at what they plead guilty to,” he said outside court as his voice trailed off.
Prosecutors unveiled the case earlier this year, saying Budovsky created an Internet bank that helped launder $6 billion for drug dealers, child pornographers, identity thieves and other criminals.
On Tuesday, Assistant U.S. Attorney Andrew Goldstein said evidence in the case included 52 terabytes of data.
Frankel told the judge that the government had told him it was the largest amount of documents produced for a single case in the history of the New York federal prosecutor’s office.
Once an American, Budovsky renounced his citizenship after setting up the company in Costa Rica, where all online businesses are legal and laws do not regulate them.
U.S. officials accuse Budovsky of using Liberty Reserve as a kind of underworld bank that handled billions of dollars in illicit transactions for 1 million users, including 200,000 in the U.S.
Budovsky has said he created a secure platform for online financial transactions, and Liberty Reserve cooperated with investigators. According to court documents, Budovsky moved his business to Costa Rica after he was convicted on state charges related to an unlicensed money transmitting business.
When he announced the charges in May 2013, U.S. Attorney Preet Bharara said Liberty Reserve had become “the bank of choice for the criminal underworld.”
He said the case might represent the largest international money laundering case ever brought by the United States.
During the Liberty Reserve investigation, authorities raided 14 locations in Panama, Switzerland, the U.S., Sweden and Costa Rica. In Costa Rica, investigators recovered five luxury cars, including three Rolls-Royces. Authorities also seized Liberty’s computer servers in Costa Rica and Switzerland.
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