Arthur Liberty, the son of a draper, was born in Chesham in 1843. After a brief schooling he was apprenticed as a draper's in Baker Street, London. After completing his training he moved to Farmer & Rogers' Great Shawl & Cloak Emporium in Regent Street.
In 1862 Liberty was appointed manager and ten years later was offered the opportunity of becoming a partner in the business. After considering the offer Liberty decided to start his own business. His wife's grandfather lent Arthur Liberty £1,500 and he was able to open a shop called East India House at 21a Regent Street.
Liberty initially concentrated on selling products made from Japan, but later imported goods from China, Java and Persia. Liberty also began producing his own range of silks. Another popular product was Umritza Cashmere, a material that combined lightness and softness with durability.
Liberty gradually expanded his business and by the 1880s his shop had seven departments: Silks, Embroideries, Furniture, Carpets, Porcelain, Curios and Miscellaneous Items. In another shop in Regent Street, Arthur Liberty sold Japanese and Chinese antiques.
There was a great demand for the goods that Liberty was selling and in 1887 he opened another store in Birmingham. Later he opened a Liberty Store in Paris. He also accepted commissions for decorating the homes of the wealthy. When Arthur Liberty died in 1917 he left over £350,000.
Miami (Liberty City) Riot, 1980
The Miami Riot of 1980 was the first major race riot since the late 1960s. In December 1979, a number of white Miami-Dade (Florida) police officers were involved in a high-speed chase involving black motorist Arthur McDuffie. Police reports said that the chase ended when McDuffie crashed his motorcycle, ultimately leading to his death. However, coroner reports suggested that the cause of death was not consistent with a motorcycle crash. Later, a responding officer following the chase testified that there was no crash, and that the police officers had beaten McDuffie to death with their flashlights.
Even with the coroner report and the testimony from police and witnesses, an all-white jury concluded the trial on May 17, 1980 with the acquittal of all officers involved in the McDuffie police brutality case. News spread to the surrounding areas and residents of mostly African American Liberty City, home to half of the city’s black and Afro-West Indian residents, took to the streets in protests which soon turned violent as some protesters began throwing objects at passing white motorists who drove through the area.
By nightfall on May 17, the violence escalated into a full blown riot as angry blacks attacked motorists fleeing their vehicles. The riot moved into neighboring white business districts and the headquarters of the Dade County Department of Public Safety.
When black leaders from the Miami-Dade County National Association for the Advancement of Colored People (NAACP) and national leaders such as Jesse Jackson were unsuccessful in halting the violence the Florida National Guard was then called in to aid the Miami-Dade police force. The Guard and local police blocked off Liberty City and from that point confined the riot to Liberty City. By May 20th order was restored. Ten blacks and eight whites died in the Miami Riot. More than 800 people had been arrested in the four day period and the property damage to the area was in excess of $80 million dollars.
Some have also argued that the riots were a clear example of the dissatisfaction and alienation of a younger post-Civil Rights/ Black Power generation of African American youth with both the tactics and strategies of an older generation of black leadership as well as with continuing racial discrimination. Their blatant disregard of the efforts of leaders like Jesse Jackson to end the conflict showed the growing gap between the views of the two generations. Coming twelve years after the Martin Luther King Riots in April 1968, the Miami conflict served as a reminder of the possibility of urban insurrection in underprivileged neighborhoods.
The iconic motif has had quite a journey
From its ancient Persian and Indian origins with its hidden messages and mysterious symbolism, the iconic motif has had quite a journey. The paisley pattern has travelled the silk routes from East to West, adorned the bandanas of cowboys and bikers, been adopted by the 19th Century boho set, been popularised by The Beatles, ushered in the hippy era and become an emblem of rock ‘n’ roll swagger and swank. And the Scottish city of Paisley, whose textiles history is intertwined with the famous print, is now bidding to be UK City of Culture for 2021.
Arthur Lasenby Liberty was an early enthusiast of paisley in the UK (Credit: From the book Liberty of London Treasures: Colour, Design, Print by Carlton)
Various paisley designs were among the many beautiful prints and garments showcased at Liberty of London, an exhibition at the Fashion and Textile Museum that showcased the textiles of the influential design company and store. Liberty’s archivist Anna Buruma explains: “Liberty has been associated with paisley style from the beginning when they sold fabrics, porcelain, rugs and shawls from the East. Paisley-style shawls are shown in the early catalogues and when they started printing their own fabrics in the 1880s, paisley designs are very much in evidence.”
From East to West
So what is behind paisley’s incredible longevity? Its symbolic power has probably played a part. The original Persian droplet-like motif – the boteh or buta – is thought to have been a representation of a floral spray combined with a cypress tree, a Zoroastrian symbol of life and eternity. The seed-like shape is also thought to represent fertility, has connections with Hinduism, and also bears an intriguing resemblance to the famous yin-yang symbol. It is still a hugely popular motif in Iran and South and Central Asian countries and is woven using silver and gold threads on to silks and fine wools for weddings and other celebrations.
But along with their innovatory and trend-setting stock, from the beginning Liberty also imported a wide range of antiques. As early as 1877-78 the South Kensington Museum (as the V&A was then known) purchased antique embroideries and rugs from Liberty. A Liberty catalogue of Eastern Art Manufactures, dating from 1880, includes antique Chinese and Japanese bronzes, enamels, jade and ceramics, and embroideries and rugs from the Near and Far East. A slightly later catalogue of Eastern Antiquities included Japanese sword guards and some European arms and armour. In addition, Arthur also organised special exhibitions of antique embroideries from all over the world, one of ancient lace, and another of antique prayer rugs from Eastern palaces.
The new 'Tudor' building of 1927 prompted a change in the focus of antiques, featuring examples of Stuart, Jacobean and earlier oak furniture with some Georgian pieces. In recent decades it was the pioneering products of Liberty, that appealed to the artistic tastes of the day, that have become the antiques. The Arts & Crafts furniture, in solid oak, or mahogany inlaid with coloured woods and mother-of-pearl the Cymric silver and Tudric pewter designed by Archibald Knox and others the jewellery and buckles of Knox and Jessie M King the Clutha glass and Cordofan candlesticks designed by Christopher Dresser and the ceramics of William Moorcroft and CH Brannam that are eagerly sought by collectors and museums at home and abroad.
Arthur Liberty - History
Right: Arthur Lasenby Liberty by Arthtur Hacker, R.A.. Left : An example of an Aesthetic house with display of probably Japanese ceramics. From Robert W. Edis, Decoration and Furnishing of Town Houses . London: Kegan Paul, 1881. Plate 11. Gloag, p. 108.
Arthur Lasenby Liberty, the founder of Liberty & Co., began by catering to an eclectic mixture of styles popular with late-Victorian leaders of taste but then went on to develop his own fundamentally different style that retained their allegiance. He began by contributing to what Mervyn Levy terms "the turmoil" of the 1890s "when there coexisted the irreconcilable polarities of English aestheticism and French decadence, the philistinism of the merchant barons of industry who bought Tadema, Leighton and Poynter, and the purist searchings of designers Christopher Dresser, Charles Rennie Mackintosh and Archibald Knox. . . .A typical aesthetic interior of the period was awash with disparate styles, each tugging at its own very different source of inspiration."
"Many of the attitudes against which the Liberty Style reacted," Levy explains, "were embodied in the Aesthetic Movement, which was itself firmly rooted in . . . Japonisme, which invaded Europe in the wake of the International Exhibition of I862, at which the arts and crafts of Japan were the main attraction."
Levy argues that Liberty was also opposed to both Art Nouveau's often soppy sensuousness based on the human form and also on that "cult of personality which linked the passion for all things oriental and Japanese with the avant-garde" whose leaders were James McNeill Whistler and Oscar Wilde . . . [who] was the very quintessence of leisurely, foppish aestheticism" (20). This cult of personality, particularly when it involved creators of art, fundamentally conflicted with Ruskin's and Morris's emphasis upon the importance of traditional craftsman and artisans. Liberty & Co., which aimed at creating great design in manufactured, even mass-produced artifacts moved even farther from the late-Romantic emphases of the aesthetes and decadents and closer to the modern movement, which it helped engender.
Gloag, John. Victorian Comfort: A Social History of Design, 1830-1900 . A. C. Black, 1961. (Reprinted 1973 by David and Charles, Newton Abbot.)
Levy, Mervyn. Liberty Style, The Classic Years, 1798-1910 . New York: Abrams, 1986.
Purpose of the Foundation
In its 2004 annual return to the IRS the foundation states that grants are restricted to organisations that match the mission of the foundation, which it states is to:
to promulgate the Christian Gospel throughout the world by any and all proper means, including, but not by way of limitation, the technical assistance of missionaries and missionary groups, the support of pastors, evangelists, missionaries, preachers and others engaged in the promulgation of the Christian Gospel, the printing and distribution of Christian literature, Bibles and tracts, and the support and operation of audio and audio-visual means of communication . "  (Pdf)
The total grants given to other organisations in 2004 amounted to $23.5 million.
In its 2004 annual return to the IRS the foundation also sets out that it has three main program areas that that it directly funds. These programs, account for $5.2 million in 2004, are:
Power For Living : Power For Living is a project which has as it's objective to acquaint as many people as possible throughout the world with the biblical account of how people can get right with God. This is done by a multi-media campaign promoting the free book, Power For Living, which is advertised on radio, television, newspapers and magazines throughout a country. The book is translated from the English edition and adapted culturally, according to the respective country. ($4.7 million in 2004) Executive Ministries: This ministry has as its objective winning and discipling business and professional executives to Jesus Christ. A small staff carries on this ministry in the following ways: evangelistic luncheons and dinner parties at which testimonials from Christian executives are given individual follow-up counseling is conducted small and large group men's, women's and couples' Bible studies are held individual follow - up counseling is conducted. ($3,435 in 2004) Literature for Little Ones: This is a literature and book distribution ministry designed primarily for children. Bibles, New testaments, story books and other Christian literature are given away without charge by our staff. The ministry is conducted in various ways such as in prisons, hospitals, orphanages and schools. The purpose of the project is to give children an opportunity to hear about Jesus the Savior and to help them learn biblical stories and teaching. ($556,200 in 2004).  (PDF, page 93).
Arthur Lasenby Liberty was born in 1843 in Chesham, Buckinghamshire. After a brief schooling he was apprenticed as a draper in Baker Street, London. In 1862 he was taken on by Farmer & Rogers’ Great Shawl & Cloak Emporium in Regent Street and was eventually placed in charge of their oriental warehouse in Regent Street where he sold their Indian shawls, Japanese prints, drawings, lacquers, porcelain and silks.
In 1875 he left to open his own shop at 218a Regent Street selling Japanese silks. Liberty could only afford to employ a young girl of 16 and a Japanese boy. The shop sold ornaments, fabric and objets d’art from Japan and the East. Liberty initially concentrated on selling products made from Japan, but later imported goods from China, Java and Persia. Liberty also began producing his own range of distinctive textiles produced by Littlers at Merton.
Liberty gradually expanded his business and by the 1880s his shop had seven departments: Silks, Embroideries, Furniture, Carpets, Porcelain, Curios and Miscellaneous Items. In another shop in Regent Street, Arthur Liberty sold Japanese and Chinese antiques.
In 1905 the shop was remodeled with Liberty now selling furniture and a wider range of products. Liberty, the store, became the most fashionable place to shop in London and the fabrics were used for both clothing and furnishings. The name Liberty became synonymous with high quality fashion.
Liberty was knighted in 1914 and then retired with his family carrying on the business.
The circumstances were grim. The year was 1941. War raged only an ocean away. The country and the citizens rallied in an unparalleled effort. In a four-year span, at eighteen U.S. cities, 2,710 identical Liberty Ships were constructed in record setting time Jacksonville, Florida, and the St. Johns River Shipbuilding Company were an essential part of that effort.
Jacksonville’s first Liberty Ship, the Ponce de Leon.
Liberty Ships were crucial to the country’s challenge. More than two-thirds of all cargo leaving the U.S. was carried by these ships among other items, the ships hauled fuel, bullets, bandages, k-rations, and blankets to war theaters overseas. In fact, the vessels were poetically called, the “cargo-carrying key to Allied Victory.”
However, the lumbering and sparsely armed ships were vulnerable. A total of 200 Liberty Ships were lost to enemy action during WW II. With 200,000 Merchant Seamen serving between 1941 and 1946, and the loss of life totaling 6,795, the seamen suffered a higher percentage of casualties than any of the services. General Douglas McArthur once stated that he held “no branch in higher esteem than the merchant marine services.”
Today, only two of the Liberty Ships remain intact, the John W. Brown, docked at Baltimore, and the Jeremiah O’Brien in San Francisco. Both serve as floating living history museums with all volunteer crews. The Brown was also the first of more than 200 Liberty Ships fitted for troops she also holds the distinction as the last surviving troop ship.
The first Liberty Ship, the Patrick Henry was built in 245 days. The record was set with the Robert E. Peary, a ship completed in 4 days, 15 hours and 29 minutes. However, the average time to build a Liberty Ship in 1943, when construction of these vessels was at a peak, was 30 days. The average cost per vessel was $1.5 million.By the middle of 1943 many new welding trainees at the Jacksonville yard were being trained by a lady who may well have been the best looking ‘Rosie’ in the country. She was Wynona P. Ely, said to be pretty enough to be a G.I. pinup girl in spite of the fact that she, like all lady welders, was denied the use of make-up on the job and had to wear ungainly overalls and low-heeled shoes.” (excerpted from the book, Liberty: The Ships that Won the War) The photo above is from the Merrill family collection. No one is certain of her identity, but it is possible she is Wynona Ely. Can you help identify her? “Speed —more speed,” says the sign. This was the all-important mantra during World War II. Jacksonville’s first Liberty Ship, the Ponce de Leon took 9 months to build. The record for completion of a Jacksonville Liberty Ship was the S.S. Telfair Stockton, launched in 31 days!
Movie star Veronica Lake was in Jacksonville September 23, 1942 for a war bond rally. She’s seen here with Merrill Company employee Luke Bramlitt. That’s young Haydon Burns, second from left. James E. Merrill (far right) is master of ceremonies at the Jacksonville launching of the S.S. William Crane Gray, July 12, 1944. From left to right is Ophelia Strum, Mrs. Louie Strum (who christened the ship), Bishop Arthur Lea, Mrs. J. Hilton Holmes, Mr. Raymond Knight (shipyard officer), Capt. Louis H. Strum, and Mr. James C. Merrill.
Names of Jacksonville’s 82 Liberty Ships Note History of Era and Remember Legends
The Jacksonville shipyard where Liberty Ships were built was one of 18 emergency shipyards nationwide. Construction of the Jacksonville yard began in 1942 and was part of a partnership with a New York firm of contractors and the local Merrill-Stevens Dry Dock & Repair Company, known locally for shipbuilding and ship repair since the nineteenth century.
In all, the Jacksonville yard produced 82 of the country’s 2,700 Liberty Ships. Only the Brown and the Jeremiah O’Brien survive as intact ships however, three other hulls are still afloat, and among them is the S.S. Arthur M. Huddell, built in Jacksonville.
Liberty Ships were traditionally named for individuals who were no longer living and who had made a significant contribution to American life. Some of the later ships were named for merchant seamen who died during the war. The names of Jacksonville Liberty Ships reveal both area and national history and sentiment of the time. Many of the names will be of interest to history buffs. Liberty Ships built in Jacksonville and the dates of completion are listed below:
Ponce de Leon, Apr. ‘43 John Gorrie, May ’43 Francis Asbury, May ’43 John Crittenden, June ’43 Sidney Lanier, July ’43 Robert Y. Hayne, July ’43 Richard Montgomery, July ’43 John Philip Sousa, Aug.’43 Henry Watterson, Aug.’43 George Dewey, Aug.’43 William Byrd, Sept. ’43 Rufus C. Dawes, Sept. ’43 Thomas Sully, Sept. ’43 Dwight W. Morrow, Oct. ’43 John S. Mosby, Oct. ’43 Grant Wood, Oct. ’43, Edward M. House, Nov. ’43 Harvey Cushing, Nov. ’43 William G. Sumner, Nov.’43 Peter Stuyvesant, Nov.’43 James Screven, Dec. ’43 Napoleon B. Broward, Dec. ’43 Arthur M. Huddell, Dec. 43 Owen Wister, Dec. ’43 Elizabeth C. Bellamy, Dec. ’43 John White, Jan. ’43.
Royal S. Copeland, Jan. ’44 John Einig, Jan.’44 Edwin G. Weed, Feb. ’44 Andrew Turnbull, Feb. ’44 Henry S. Sanford, March ’44 James L. Akerson, Mar. ’44 Edward W. Bok, Mar. ’44 Thomas A. McGinley, Mar. ’44 Frederick Tresca, April ’44 Edward A. Filene, Apr. ’44 Richard K. Call, Apr. ’44 August Belmont, Apr. ’44 Arthur R. Lewis, May ’44 George E. Merrick, May ’44 James K. Paulding, May ’44 Thomas J. Lyons, June ’44 Raymond Clapper, June ’44 Hugh J. Kilpatrick, June ’44 Noah Brown, June ’44 Hendrik Willem Van Loon, June ’44 Stephen Beasley, July ’44 Jasper F. Cropsey, July ’44 William Crane Gray, July ’44 Ethelbert Nevin, July ’44 W.S. Jennings, Aug.’44 Filipp Mazzei, Aug ’44.
Henry Hadley, Aug. ’44 Alfred I. DuPont, Aug. ’44 Irvin S. Cobb, Aug. ’44 Negley D. Cochran, Sept. ’44 Anna Dickinson, Sept. ’44 John Ringling, Sept. ’44 Michael De Kovats, Sept. ’44 John H. McIntosh, Sept. ’44 Jerry S. Foley, Oct. ’44 Robert Mills, Oct. ’44 Morris C. Feinstone, Oct. ’44 David L. Yulee, Oct. ’44 George E. Waldo, Oct. ’44 Henry B. Plant, Nov. ’44 Frederic W. Galbraith, Nov. ’44 C.W. Post, Nov. ’44 Junius Smith, Nov. ’44 Isaac M. Singer, Nov. ’44 Telfair Stockton, Nov. ’44 Louis Bamberger, Dec. ’44 Isaac Mayer Wise, Dec. ’44 Henry B. Plant II, Dec. ’44 Walter M. Christiansen, Dec. ’44 Grover C. Hutcherson, Dec. ’44. Fred C. Stebbins, Jan. ’44 Harold A. Jordan, Jan. ’45 John Miller, Jan. ’45 James H. Courts, Jan ’45 Fred Herrling, Feb. ’45 and Thomas L. Haley, Feb. ’45.
Liberty Ship S.S. John W. Brown Visited Jacksonville June 4 -10, 2002
One of two remaining Liberty Ships.
The John W. Brown, a sixty-year-old Liberty Ship, steamed into Jacksonville in early June, 2002. During World War II, more than 2,700 Liberty Ships were constructed throughout the nation Jacksonville produced 82 of the ships. The Brown was docked at the foot of Jacksonville’s Newnan Street for a six-day stay, and Jacksonville Historical Society members attended a June 6th reception at the Adam’s Mark Hotel, followed by a tour of the vessel.
From 1946 to 1982, the Brown served as a floating high school for the city of New York. Project Liberty Ship relocated the Brown to Baltimore in 1988 since that time, 9 million in cash and 8 million in in-kind services have been donated to the ship’s restoration.
10 Interesting Facts and Figures About Liberty of London You Might Not Know
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Looking like a building out of Elizabethan times, the Liberty of London department store carries all manner of luxury goods. In 1874, after spending more than a decade working for Messrs Farmer and Rogers, Arthur Lasenby Liberty decided to open his own store in London. The store bearing his named opened the next year, dealing with fabrics, ornaments, and Japanese art objects. Eventually, the store grew in its offerings until it was one of the most prominent stores in the city. Sure, you may know some interesting things about Harrods or Selfridges, but not you can sit back and read some interesting facts for Liberty.
Arthur Liberty obtained a loan of £2,000 from Henry Blackmore, the father of his (then) fiancée Emma Louise Blackmore to open his store at 218a Regent Street. Business was so successful that Liberty had the loan paid off eighteen months later.
A Seaworthy Shop
The well-known Liberty store with its Tudor revival main entrance on Great Marlborough Street didn’t come about until the 1920s. Construction began in 1924 and used timber recycled from the ships HMS Hindustan and HMS Impregnable. The frontage has the same length as the Hindustan. The weathervane on top of the store bears a model of the Mayflower, the ship that brought the Pilgrims to America.
Dotted around the interior of the store are many heraldic shields as part of the decorations. The individuals represented on these shields include William Shakespeare, the six wives of Henry VIII, and many more.
Bringing Liberty to America
In 1882, author and playwright Oscar Wilde went on a tour of the United States, bringing with him a wardrobe full of clothes from Liberty, creating a demand for the store’s fashions with Americans. Wilde was a huge fan of Liberty, saying, “Liberty is the chosen resort of the artistic shopper.”
The Colors of Liberty
Produced from 1878 in collaboration with Thomas Wardle’s printers and dyers, “Liberty art fabrics” helped shaped the store’s image in the late 19th Century. Also known as “Liberty colours”, they were part of the Art Nouveau movement, which in Italy became so synonymous with the department store that it was referred to as Stile Liberty.
The clock on the Kingly Street entrance has some words of wisdom for the shoppers who pass by. It says “No minute gone comes back again, take heed and see ye do nothing in vain.” Above the clock, the striking of the hour chime brings out figures of St. George and the Dragon, to recreate their legendary battle every sixty minutes. On each corner of the clock are the angels of the Four Winds: Uriel (south), Michael (east), Raphael (west), and Gabriel (north).
When Liberty opened in 1875, the store had only three employees besides Arthur Liberty. This is a sharp contrast from today where the various Liberty stores and brands employee hundreds of people.
Though a Liberty is not in charge of the store anymore, the descendants of Emma Blackmore still own shares in the company and exercise their influence over its operations. In the 1990s, they represented 16% of the shareholders with twenty-five members of the Blackmore, Moffett, and Codling families. As the couple had no children of their own, when Arthur Liberty died, control of the company passed to the Stewart-Liberty family, which also represented a significant portion of the company’s Board of Directors. The two groups came into conflict about this time over the direction of Liberty, a fight that ultimately resulted in the ousting of then-chairman Denis Cassidy.
In 2013, Channel Four featured Liberty in a three-part documentary that focused on Managing Director Ed Burstell and the retail team in the lead-up to the Christmas holidays. A second series followed. You can watch it in the USA on Acorn TV.
Happy 140 Years!
Liberty of London celebrated its 140th Anniversary from its founding in 1875. To celebrate, the store hosted many parties and special events. They also introduced a new fabric pattern named “Mayflower”.
Liberty Reserve Founder Arthur Budovsky Sentenced In Manhattan Federal Court To 20 Years For Laundering Hundreds Of Millions Of Dollars Through His Global Digital Currency Business
Preet Bharara, the United States Attorney for the Southern District of New York, and Leslie R. Caldwell, Assistant Attorney General for the Justice Department’s Criminal Division, announced that ARTHUR BUDOVSKY, 42, was sentenced today in Manhattan federal court to 20 years in prison for running a massive money laundering enterprise through his company Liberty Reserve, a virtual currency once used by cybercriminals around the world to launder the proceeds of their illegal activity. BUDOVSKY was arrested in Spain in May 2013 and was extradited to the United States in October 2014. BUDOVSKY pled guilty to one count of conspiring to commit money laundering on January 29, 2016, three days before his trial was scheduled to begin. U.S. District Judge Denise L. Cote imposed today’s sentence, noting that the defendant did not express any “genuine remorse,” and that his crimes caused “widespread harm” and led to “countless victims of fraud around the world.”
Manhattan U.S. Attorney Preet Bharara stated: “Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe. Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws.”
Assistant Attorney General Leslie R. Caldwell stated: “The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime. Together with our American and international law enforcement partners, we will protect the public even when criminals use modern technology to break the law.”
According to the allegations contained in the Indictment filed against Liberty Reserve, BUDOVSKY, and six other individual defendants BUDOVSKY’s plea agreement the evidence filed with the sentencing submissions for BUDOVSKY and statements made in related court filings and proceedings:
Liberty Reserve S.A. (“Liberty Reserve”) billed itself as the Internet’s “largest payment processor and money transfer system” and operated one of the world’s largest and most widely used digital currencies, which could be used to send and receive payments, via the Internet, to and from people all over the world. At all relevant times, BUDOVSKY directed and supervised Liberty Reserve’s operations, finances, and business strategy.
Liberty Reserve was originally conceived by BUDOVSKY and co-defendant Vladimir Kats in Brooklyn, New York, in approximately 2001, and became operational in late 2005. From his previous experience with “GoldAge” – a digital currency exchange business that he ran with Kats – BUDOVSKY was aware that a substantial volume of digital currency transactions were related to Internet investment schemes called high-yield investment programs (“HYIPs”), which he knew to be online Ponzi schemes. BUDOVSKY was also aware that digital currencies were used by other online criminals, such as credit card traffickers and identity thieves.
BUDOVSKY designed Liberty Reserve specifically to appeal to these online criminals in order to capture their business. Among other things, BUDOVSKY set up Liberty Reserve to have weak anti-money laundering (“AML”) controls and allowed users to move money anonymously through Liberty Reserve’s system, regardless of the volume or provenance of the funds. BUDOVSKY also marketed Liberty Reserve specifically to HYIP operators and other criminal clientele.
In May 2006, BUDOVSKY and Kats were arrested and later pled guilty to operating GoldAge as an unlicensed money transmitting business. Following their arrests, over the next two years, BUDOVSKY and Kats moved Liberty Reserve’s operations offshore to Costa Rica in an attempt to insulate themselves from the reach of U.S. law enforcement. BUDOVSKY was so committed to evading U.S. law enforcement that he later renounced his U.S. citizenship and became a Costa Rican citizen. In May 2008, BUDOVSKY pushed Kats out of Liberty Reserve and became the sole beneficial owner and principal operator of the company, with final decision-making authority over company decisions. BUDOVSKY maintained this role until Liberty Reserve was shut down in May 2013.
During the time period from 2009 to 2013, Liberty Reserve reached the height of its activity. At its peak in late 2012, Liberty Reserve handled a transactional volume of over $300 million per month, a significant portion of which came from users in the United States. BUDOVSKY knew that a substantial number of these transactions were connected to HYIPs and other online criminal activities, and continued to operate Liberty Reserve to cater to these customers. Among other things, BUDOVSKY and his co-conspirators intentionally failed to implement effective AML controls at Liberty Reserve. BUDOVSKY and his co-conspirators also took steps to prevent the Costa Rican regulatory authorities and Liberty Reserve’s own compliance officials from discovering the criminal transactions flowing through Liberty Reserve.
Liberty Reserve ultimately grew into a financial hub for cybercriminals around the world who used it to amass, distribute, store, and launder criminal proceeds derived from HYIPs, credit card trafficking, stolen identity information, and computer hacking. By May 2013, when it was shut down as a result of the Government’s criminal investigation, Liberty Reserve had more than 5.5 million user accounts worldwide, and had processed more than 78 million financial transactions with a combined value of more than $8 billion. United States users accounted for the largest segment of Liberty Reserve’s total transactional volume – between $1 billion and $1.8 billion – and the largest number of user accounts – over 600,000. As part of his plea agreement, BUDOVSKY admitted to laundering between $250 million and $550 million in criminal proceeds linked to Liberty Reserve accounts based in the United States.
Two co-defendants – Mark Marmilev and Maxim Chukharev – pled guilty and have been sentenced to five and three years in prison, respectively. Two other co-defendants – Vladimir Kats and Azzeddine El Amine – are currently scheduled to be sentenced before U.S. District Judge Denise L. Cote on May 13, 2016. Charges against Liberty Reserve and two individual defendants who have not been apprehended remain pending.
Mr. Bharara praised the outstanding work of the United States Secret Service, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which worked together in this case as part of the Global Illicit Financial Team. Mr. Bharara also thanked the United States Secret Service’s New York Electronic Crimes Task Force for its extraordinary assistance with the investigation. Additionally, Mr. Bharara specially thanked all the international law enforcement agencies that assisted in the investigation, in particular, the Judicial Investigation Organization in Costa Rica, Interpol, the National High Tech Crime Unit in the Netherlands, the Spanish National Police-Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation, and the Swiss Federal Prosecutor’s Office.
This case is being prosecuted jointly with the Department of Justice’s Asset Forfeiture and Money Laundering Section (“AFMLS”), which is overseen by Assistant Attorney General Leslie R. Caldwell. Mr. Bharara thanked AFMLS for its partnership and also thanked the Department of Justice’s Office of International Affairs and Computer Crime and Intellectual Property Section for their support.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Christian Everdell, Christine Magdo, and Andrew Goldstein of the Southern District of New York and Trial Attorney Kevin Mosley of AFMLS are in charge of the prosecution.List of site sources >>>