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Russian suspected of $4bn Bitcoin laundering op to be extradited to US

Anonymous Coward

At what cost?

The Feds seem to be making a habit of extraditing foreign nationals from third party countries. Whilst most of them deserve it, I very much doubt they recover any money, nor deter other foreign criminals. So, how much is it costing Uncle Sam? At a reported average of $30k per prisoner per year, a ten year sentence is going to be $300k, plus the legal costs of extradition, trial and presumably deportation at the end of the sentence. I'd guess that there's another $100k on legal fees, possibly treble that if you include the investigation. So perhaps half a million bucks to take one foreign crim out of circulation for ten years. Does that count as value for money?

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Anonymous Coward

Re: At what cost?

Uncle Sam just has the Federal Reserve print whatever it needs so it's just a drop in the bucket. It's really the Federal Reserve that's scared of bitcoin and such hence the steep unwarranted penalty.

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Silver badge

Re: At what cost?

Same reason that any law is ever enforced. If you don't chase criminals, you get more criminals.

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Re: At what cost?

Same reason that any law is ever enforced. If you don't chase criminals, you get more criminals.

That assumes that criminals are logical and well informed, which I dispute. My guess is that Russian cybercrims have zero fear of extradition (and on the numbers, they'd be right). The rotating prison populations of the developed world indicate that you're either a criminal who will reoffend on release, or you're not. I don't steal, not because there's a law against, but because I don't need to and the moral code in my society is that you don't steal. Those who break that code and do steal aren't put off by actual or the risk of arrest, they steal because that's what they do (with half of it to fund a drug habit).

The data's fairly clear, enforcement takes criminals out of circulation for a while, but it doesn't reform many of them, and it doesn't deter them.

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WTF?

Re: At what cost?

How much does it cost to catch, prosecute and possibly imprison someone that stole a £20 bottle of Whiskey from Tesco?

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Anonymous Coward

Can't resist as well

Why would you ever need to launder money out of Russia? Seriously though I thought that was what London was for.

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Anonymous Coward

Re: Can't resist as well

Why would you ever need to launder money out of Russia?

Because what used to be above board in Eltsin days, under the table in the early Putin days is slowly stopping to be the normality. Like it or not Russia is becoming a normal economy where the state wants to collect taxes and keep the money in the country. In fact, the currency pressure on its bank system from sanctions did have an interesting side effect - they are actually starting to look into the grey and black market now instead of injecting more of the black needle (quote from Medvedev - he likened their economic addiction to oil revenue to heroin).

Seriously though I thought that was what London was for.

Correct. However, all the people who had something to launder with the benevolent permission of the ruling class have already laundered it. That was to a large extent a deliberate policy on Putin's part: "If you do not meddle in the internal politics, grab your money and f*ck off I am not going to make an issue of that". It is also one of the reasons why he has only cemented his power - everyone who could oppose him (which takes LOTS OF MONEY) decided that it will be healthier to move to Londongrad and bark from the other side of the fence.

The remaining ones which are trying to launder it now are the smaller criminals and/or the people who are not playing on the right hockey team. As a result the fact that most Russians arrested around Europe have two competing extradition orders is not surprising(*).

(*)Cannot be arsed to look it up - the earlier article from this morning about an arrest in Spain also had two extradition requests on his head

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Gold badge

Re: Can't resist as well

You might not need to launder money in Russia - but you also don't want to keep it there. Or at least, not all of it. Even if you're in with Putin's ruling group now, that may change tomorrow. Or you may just be the collateral damage in some internal political bunfight - or turn out to have too close a financial relationship with someone else who rocks the boat.

Plus Putin won't be in charge forever, at some point there'll be a changing of the guard. If you're not in with the new group in say twenty years time, then it will be very useful to have a nest-egg abroad.

Bitcoin might start to look a lot more attractive than just buying a house in London/New York/Berlin/Cyprus, if you're on the EU or US sanction lists because of Crimea.

That's the same reason why so much Chinese cash has gone abroad. The Party change leadership every ten years, and President Xi has been a lot tougher on corruption (at least if it's done by his enemies within the Party), than the last few regimes. China have currency controls, so again, that makes Bitcoin look attractive.

I'm not personally convinced that Bitcoin is liquid enough to make serious sized transactions, even if you move your money over months, but I've not done proper research, only briefly looked at the turnover figures of the top few exchanges.

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Re: Can't resist as well

The Russian economy is hurting due to low oil prices, like many large producers they thought the high oil prices of 2004-2014 would be permanent if not go even higher, and budgeted on that basis. Between that and the sanctions over Crimea they're starting to feel pain. If you keep money in Russia it risks losing a lot of value if their economy crashes.

Russia knows this so they've been making it more difficult to move money out of Russia, because the more cash that flees the more it hurts the value of the ruble.

Combined with the stability concerns like I ain't Spartacus detailed, someone who has a lot of money in Russia has very good reasons to want at least a good chunk of it out of Russia so they don't go down with the ship if oil prices remain low another five years and Russia sinks.

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Anonymous Coward

Russian prison or American prison ?

Better flip a bitcoin to decide on the lesser of two weevils.

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Rich guy who committed white collar crime? He'll do easy time if he's jailed in the US.

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FAIL

Silly guy

Should have gotten a job for HSBC then he could launder away consequence free.

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Unhappy

Greek Justice Is For Sale and the Greeks Hate The Yanks

A stupid adult daughter of my Greek friend, along with her two junior school children was arrested for smuggling some white powder drugs in to Greece from Turkey. She was tossed in to pre-trial jail near Agia Paraskevi (Greek: Αγία Παρασκευή) (Athens),

The inmates seem to be OK there, she had her cell handset with her (legally), and the food was decent and visiting hours long.

The father, my friend, hired a lawyer and after four months wait she was hustled in to court and the charge dismissed on a technicality! Turns out the four months was needed to get a USD$10,000 + bribe agreed upon between the defence attorney and the judge (using his clerk).

Presumably Alexander Vinnik didn't have a connected lawyer or a financially stressed judge!

There is certainly no love lost between large sections of the ruling classes after Andreas Georgios Papandreou and the Konstantinos Karamanlis (an anti-American government) and later PASOK.

This feeling was exacerbated when cell handsets were found to be tapped (https://en.wikipedia.org/wiki/Greek_wiretapping_case_2004%E2%80%9305)(https://www.schneier.com/blog/archives/2006/06/greek_wiretappi_1.html) including those of the Prime Minister Kostas Karamanlis and members of his family, the Mayor of Athens, Dora Bakoyannis, most phones of the top officers at the Ministry of Defense, the Ministry of Foreign Affairs, the Ministry for Public Order, members of the ruling party, ranking members of the opposition Panhellenic Socialist Movement party (PASOK), the Hellenic Navy General Staff, the previous Minister of Defense and one phone of a locally hired Greek American employee of the American Embassy. Phones of Athens-based Arab businessmen were also tapped.

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Anonymous Coward

Beware of Russians bearing bits

He may be in for a Hellenic of a time

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Re: Beware of Russians bearing bits

That would be a tragedy.

But seriously. What do the US even remotely have to do with this case?

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Re: Beware of Russians bearing bits

I would imagine some of the stolen bitcoin he was laundering belonged to US citizens?

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Black Helicopters

We are right; you are ALWAYS criminals.

I would have thought with the present theft of people's personal property by those gangs dressed up masquerading as law enforcement it would be a case of:

All you bitcoins are belong to US.

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