Money laundering: US indicts seven people in $6 billion Liberty Reserve fraud

The money laundering network, which had spread its wings to 17 countries, including US, UK, China, Russian, Canada, Australia among others was run by a Costa Rican company Liberty Reserve

The US Federal authorities has indicted seven people in a $6 billion money-laundering scheme spread in 17 countries and run by Costa Rica based Liberty Reserve.


Announcing the details of the massive online fraud, the Acting Assistant US Attorney, Mythili Raman said Liberty Reserve processed at least $6 billion for more than a million clients, including two lakh in the US.


“Liberty Reserve operated, on an enormous scale, a digital currency system designed to provide cyber and other criminals with a way to launder their profits without leaving a trace. Liberty Reserve was a massive criminal enterprise servicing more than one million users globally — including 2 lakh in the United States alone,” she told reporters.


“The Company’s very purpose was to launder its users’ criminal proceeds through the US and global financial system,” Raman said.


So committed, in fact, was the principal founder of Liberty Reserve to avoid the reach of US law, that, according to the indictment, in 2011 he formally renounced his US citizenship and became a Costa Rican citizen, telling immigration authorities that he was concerned the software his company was developing “might open him up to liability in the US,” Raman said.


The US authorities also seized five domains, namely, the domain name of Liberty Reserve and the domain names of four exchanger websites that were controlled by one or more of the defendants; 45 bank accounts were restrained or seized; and a civil action was filed against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering.


The US Attorney Preet Bharara said the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers.


The investigation and takedown involved law enforcement action in 17 countries, including Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada and the US, the Department of Justice said.


As need for new flood maps rises, Congress and Obama cut funding

Funding to update the US's decades-old flood maps has been cut in half in recent years, even as extreme weather has grown more frequent

As the United States grows warmer and extreme weather more common, the federal government’s flood insurance maps are becoming increasingly important.

The maps, drawn by the Federal Emergency Management Agency, dictate the monthly premiums millions of American households pay for flood insurance. They are also designed to give homeowners and buyers the latest understanding of how likely their communities are to flood.

The government’s response to the rising need for accurate maps? It’s slashed funding for them.

Congress has cut funding for updating flood maps by more than half since 2010, from $221 million down to $100 million this year. And the president’s latest budget request would slash funding for mapping even further to $84 million — a drop of 62 percent over the last four years.

 In a little-noticed written response to questions from a congressional hearing, FEMA estimated the cuts would delay its map program by three to five years. The program “will continue to make progress, but more homeowners will rely on flood hazard maps that are not current,” FEMA wrote.

The cuts have slowed efforts to update flood maps across the country.

In New England, for instance, FEMA is updating coastal maps but has put off updating many flood maps along the region’s rivers, said Kerry Bogdan, a senior engineer with FEMA’s floodplain mapping program in Boston.

“Unfortunately, without the money to do it, we’re limited and our hands are kind of tied,” she said.

Many of the flood maps in Vermont — including areas near Lake Champlain that have recently flooded — are decades out of date. “There are definitely communities that really need that data,” said Ned Swanberg, the flood hazard mapping coordinator with Vermont’s Department of Environmental Conservation.

Asked about the cuts, a spokesman for the White House’s Office of Management of Budget directed to us FEMA, which did not respond to our requests for comment.

New maps can guide development toward areas that are less likely to flood. They also tend to be far more accurate. Today’s mapmakers can take advantage of technologies including lidar, or laser radar, and ADCIRC, a computer program that’s used to model hurricane storm surge. They can also incorporate more years of flooding data into their models.

“It is disconcerting to have counties and areas where people still have maps from the 1970s,” said Suzanne Jiwani, a floodplain mapping engineer with Minnesota’s Department of Natural Resources.

The slashed funding for the mapping program hasn’t gone unnoticed in Congress.

Rep. David E. Price, a North Carolina Democrat on the House Appropriations subcommittee that is responsible for FEMA’s budget, told W. Craig Fugate, the FEMA administrator, at a hearing in March 2012 that FEMA’s budget “continues to lowball funding” for updating the country’s flood maps.

“Both Republican and Democratic Administrations have generally made inadequate requests for Flood Hazard Mapping and Risk Analysis funding, and under the Republican majority funding provided has been inadequate,” Price said in a statement to ProPublica.

Andrew High, a spokesman for Price, said the congressman had pushed for modest boost in funding, about $10 million this year.

It was a question from Price that prompted FEMA to detail the delays. FEMA said its ultimate goal was to get 80 percent of the country’s flood hazard data up-to-date. Cutting funding for the program “is a difficult decision,” FEMA wrote, “but it’s reasonable given multitude of competing national priorities and limited resources.”

FEMA also funds its maps through the National Flood Insurance Program. It takes a small slice of homeowners’ flood insurance premiums, about $150 million in the 2013 fiscal year. But the flood insurance programis also in trouble, and income from the premiums is already stretched thin. The program has more than $20 billion in debt after paying out massive claims after Katrina and Sandy, and it took in only $3.6 billion in premiums last year.

As part of an overhaul to the insurance program last year, Congress authorized the government to spend $400 million a year for the next five years to update flood maps. But for the 2013 fiscal year, Congress has appropriated just a quarter of that.
Sequestration has cut another $5 million, according to the Office of Management and Budget, leaving $95 million for flood mapping this year.

That’s not nearly enough, said Larry Larson, director emeritus of the Association of State Floodplain Managers, a trade organization based in Madison, Wis.

“To get the mapping done, you need probably $400 million a year for 10 years,” Larson said.

The experiences of some homeowners after Sandy illustrate the dangers of outdated flood maps.

FEMA was in the process of updating the maps in New York City and New Jersey when Sandy hit. After the storm, the agency rushed to complete “advisory” flood maps designed to give homeowners a rough idea of how much they might need to raise their damaged homes by to avoid catastrophically high flood insurance premiums — more than $30,000 a year for some homeowners in the worst flood zones.

But homeowners like George Kasimos, whose Toms River, N.J., house was damaged in the storm, say they don’t want to shell out tens of thousands of dollars to raise their homes until FEMA has finalized the new maps. FEMA plans to release preliminary maps for New Jersey this summer, but the final ones aren’t expected until late next year. (Scott Duell, the risk analysis chief for FEMA in New York, said that the cuts had not slowed down work on the new maps in New York and New Jersey.)

Kasimos said any cuts to the flood mapping program were shortsighted.

“There’s going to be another hurricane somewhere, there’s going to be another disaster,” he said. “If you’re cutting the flood mapping program, somebody’s going to get screwed.”




Vodafone To Pay Rs25,000 to Doctor for Unsolicited Calls

Maharashtra State Consumer Disputes Redressal Forum has upheld a lower court order which asked the private mobile service provider to pay Rs20,000 compensation and Rs5,000 costs to a doctor for failing to stop unsolicited commercial phone calls. Dr Ashish Gala had registered with Vodafone on the “Do not Call list”. Yet, he got calls from various companies following which he filed a complaint with the service-provider on 30 August 2008, saying Vodafone should have ensured that he did not get the calls. Vodafone argued that it was not deficient in service as, under Telecom and Solicited Commercial Communications Regulations, 2007, there is no positive obligation on it to stop unsolicited commercial calls. In fact, Vodafone said, Telephone Regulatory Authority of India did not completely and immediately stop it; and acknowledges that such communication or calls cannot be stopped entirely. SR Khanzode and Dhanraj Khamatkar, in their order, disagreed. “Deficiency in service within the meaning of Section 2(1)(g) of the Act is well established as against Vodafone,” they held. 


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