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Preet Bharara, United States Attorney for the Southern District of New York, describes charges against Costa Rica-based Liberty Reserve, one of the worlds largest digital currency companies and seven of it's principals and employees for allegedly running a $6- billion money laundering scheme at a news conference in New York, May 28, 2013. According to the indictment "Liberty Reserve has emerged as one of the principal means by which cyber-criminals around the world distribute, store and launder the proceeds of their illegal activity".

Mike Segar/Reuters

A man accused of creating an online, underworld bank that helped launder $6-billion for drug dealers, child pornographers, identity thieves and other criminals was facing his first court appearance in Manhattan.

Arthur Budovsky, 40, the Costa Rican founder of currency transfer and payment processing company Liberty Reserve, was scheduled to appear in federal court in Manhattan on Tuesday afternoon. He was extradited from Spain to the U.S. on Friday.

Once an American, Budovsky renounced his citizenship after setting up the company in Costa Rica, where all online businesses are legal and there aren't laws regulating them.

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Budovsky was arrested in Spain on May 23 and held to face a Manhattan indictment against him and others.

U.S. officials accuse Budovsky of using Liberty Reserve as a kind of underworld bank that handled about $6-billion worth of 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 co-operated 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 money laundering charges in May 2013, U.S. Attorney Preet Bharara said Liberty Reserve "became 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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