Connect to share and comment

Malaysia police track 'money trail' in US fraud probe

PlacardEnlarge
(Globalpost/GlobalPost)

Malaysian police have been cooperating with authorities overseas against a global online currency operator being probed in the US on allegations of massive money-laundering, a report said Thursday.

The United States on Tuesday unveiled what it called the world's largest money-laundering investigation, targeting the digital currency business Liberty Reserve.

The Costa Rica-based entity, which handled huge sums 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 exchanges, 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, was quoted by The Star daily as saying.

"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.

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 to have facilitated global crime.

A leading Malaysian opposition figure said the case highlighted a "culture of corruption" under the scandal-prone coalition that has ruled the country for 56 years.

"The time has come for the (government) to stop being in denial by adopting genuine financial reform to clean up and stop such criminal activities" as illicit outflows and money-laundering, parliamentarian Lim Guan Eng said in a statement.

Corruption is a major concern in Malaysia.

US-based Financial watchdog Global Financial Integrity said last year that Malaysia in 2010 suffered an estimated $64 billion in illicit capital outflows, second only to economic giant China.

dma/ste/sm

http://www.globalpost.com/dispatch/news/afp/130530/malaysia-police-track-money-trail-us-fraud-probe