How the 'PayPal for criminals' allegedly laundered $6 billion

"If Al Capone were alive today, this is how he'd be laundering money."

Preet Bharara
(Image credit: AP Photo/Richard Drew)

Federal prosecutors in New York announced Tuesday that they have charged seven men with laundering $6 billion online under the guise of a global currency exchange called Liberty Reserve. The company, prosecutors said, operated in "the shadowy netherworld of cyberfinance," allegedly pulling off what officials believe to be the largest online money laundering operation in history, and earning a comparison to an illegal version of PayPal.

Over the course of seven years, Liberty Reserve allegedly made 55 million transactions for millions of customers around the world, including some 200,000 from the United States. U.S. attorney in Manhattan Preet Bharara said a majority of the funds came from criminal activity like stolen credit cards, drug trafficking, and child pornography, but he also invited anyone with legitimate accounts to contact his office to recover money.

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Carmel Lobello is the business editor at TheWeek.com. Previously, she was an editor at DeathandTaxesMag.com.