‘Black market bank’ Liberty Reserve officer gets 5 years

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Preet Bharara, U.S. Attorney for the Southern District of New York, explains a chart outlining Liberty Reserve's global interests in a press conference in May 2013 Preet Bharara, U.S. Attorney for the Southern District of New York, explains a chart outlining Liberty Reserve's global interests in a press conference in May 2013

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The former chief technology officer of Liberty Reserve SA, described by the U.S. as a “black-market bank” that masked more than $6 billion in criminal proceeds, was sentenced to five years in prison for helping run an illegal money-remitting business.
Mark Marmilev, 35, of Brooklyn, New York, who helped design and maintain the operation’s technological infrastructure, received the maximum term today at a hearing in Manhattan federal court.
“This was a money transfer system that was run in such a way that it gave great assistance to a variety of criminal enterprises,” U.S. District Judge Denise Cote said before sentencing Marmilev.
Liberty Reserve, incorporated in Costa Rica, was one of the world’s most widely used digital currency services, according to the U.S. The company was created and structured “as a criminal business venture, one designed to help criminals conduct illegal transactions,” U.S. Attorney Preet Bharara said. Prosecutors shut down the company last year.
Liberty Reserve had an estimated 1 million users around the world and conducted a total of about 55 million transactions -- almost all of them illegal -- including 200,000 in the U.S., Bharara said. Investigators found that criminal rings used Liberty Reserve to distribute illicit proceeds from Vietnam, Nigeria, Hong Kong, China and the U.S.
Money laundering
The company helped users launder money from crimes or transfer funds among associates, prosecutors said. Liberty Reserve’s digital currency was used by people committing identity theft, credit-card fraud, computer hacking, child pornography and narcotics trafficking, prosecutors said.

An image of the Liberty Reserve website in Vietnam that was shut down in May 2013 following a probe launched against the Costa Rica based entity in the US on money laundering suspicions.
Marmilev, who was born in Ukraine, is one of four defendants who have pleaded guilty in the case. Charges are pending against three others, including Liberty Reserve founder Arthur Budovsky.
Marmilev has been confined for almost 19 months. He’s subject to deportation when he’s released, his lawyer told Cote.
The U.S. today filed a civil case seeking forfeiture of a Brooklyn grocery store and a part interest in Grimaldi’s Pizzeria in Coney Island. The government claims Marmilev and Budovsky used $1.6 million in illegal proceeds to buy the businesses and used the grocery to launder money.
The case is U.S. v. Kats, 13-cr-00368, U.S. District Court, Southern District of New York (Manhattan).

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