Liberty Reserve, one of the largest hubs for anonymous online banking services, has been indicted under charges of operating a $6 billion money-laundering scheme. The site went offline late last night, replaced by a notice that the domain had been seized by the US Global Illicit Financial Team. This morning, founder Aurthur Budovsky was arrested in Spain. A Russian citizen, yet to be named, was also arrested in Costa Rica, and the Justice Department expects to extradite both men to the United States for trial.

Liberty Reserve functioned as a de facto currency, converting funds into "Liberty Reserve Dollars" which could be exchanged anonymously. The indictment claims the site processed more than $1.4 billion in transactions each year, facilitating crimes from identity theft to narcotics trafficking, and operating through shell companies in Cyprus, Russia, Hong Kong, China, Morocco, Spain and Australia to cover their tracks. The owners allegedly told authorities they had ceased operation prior to today's raids, but continued to operate. The service had become a particularly visible tool for online banking fraud and malware sales, and researcher Brian Krebs reports that one hacker said the shutdown would cost him $25,000.

It's not the first time Budovsky has run into trouble with the Justice Department. On July 27th, 2006, his Brooklyn-based company GoldAge was indicted for illegal money transmittal. He was sentenced to five years of probation, after which he renounced US citizenship and moved to Costa Rica to found Liberty Reserve.