Liberty Reserve: Suspects plead not guilty in fraud probe

August 15, 2014

NEW YORK – Two suspects pleaded not guilty Thursday in what U.S. authorities say is the largest international money laundering prosecution, which targeted a Costa Rica-based digital currency operator.

Vladimir Kats, 41, and Mark Marmilev, 27, appeared before Judge Denise Cote in a U.S. federal court in Manhattan.

Along with five others implicated in the case, the two men worked at Liberty Reserve, which handled huge amounts of money outside the control of national governments and is accused of running a $6 billion money laundering scheme.

All are charged with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business, as well as operation of an unlicensed money transmitting business.

The illegal transactions occurred between 2006 and 2013, according to the indictment.

Five of the seven were arrested in a May 24 roundup launched simultaneously in Costa Rica, Spain and New York, sealing the fate of a company that had been one of the most successful in the popular but increasingly scrutinized world of unofficial banking and virtual currencies.

Two other suspects, Allan Hidalgo and Ahmed Yassine, remain at large. Both are Costa Ricans and according to public immigration records, are still in Costa Rica.

The probe involved law enforcement in 17 countries and “is believed to be the largest money laundering prosecution in history,” prosecutors said.

Authorities say that when Liberty Reserve realized it was under investigation it made a show of shutting down, yet continued to operate behind an array of shell companies in Australia, China, Cyprus, Hong Kong, Morocco, Russia and Spain.

The next hearing is scheduled for Aug. 6. At Thursday’s session, Cote said the government hopes to produce evidence in the case on approximately June 21.

If convicted, the accused face up to 30 years in prison.

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