Security Experts:

Connect with us

Hi, what are you looking for?

SecurityWeekSecurityWeek

Cybercrime

Liberty Reserve CTO Pleads Guilty to Money Laundering Charges

The former chief technology officer of one of the world’s most popular digital currency services has pleaded guilty to money laundering charges in federal court.

The former chief technology officer of one of the world’s most popular digital currency services has pleaded guilty to money laundering charges in federal court.

 Mark Marmilev, 35, of Brooklyn, former CTO of Liberty Reserve, pleaded guilty in front of U.S. District Judge Denise L. Cote in New York last week on charges that he helped launder billions in suspected criminal proceeds.

“Marmilev designed and maintained a massive criminal infrastructure in cyberspace for one of the world’s most widely used digital currency systems, which laundered billions in criminal proceeds,” said Assistant Attorney General Leslie R. Caldwell, in a statement. “This is the third conviction in the largest international money laundering case ever brought by the department, and we will continue to ensure that virtual currencies are not misused to facilitate criminals hiding from the U.S. justice system.”

According to allegations in the indictment and statements made in related court proceedings, Liberty Reserve was incorporated in Costa Rica in 2006. It was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes and emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder their profits, according to authorities.

Before being shutdown in May 2013, Liberty Reserve had more than one million users worldwide – including more than 200,000 users in the United States – who conducted roughly 55 million transactions through its system totaling more than $6 billion in funds. These funds included suspected proceeds from credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes. 

Marmilev and Liberty Reserve founder Arthur Budovsky were among seven individuals charged in the indictment. Two co-defendants – Vladimir Kats and Azzeddine el Amine – have previously pleaded guilty and are awaiting sentencing. The indictment also charged Liberty Reserve with conspiracy to commit money laundering and operation of an unlicensed money transmitting business, and the charges remain pending, authorities said.

“As the chief technology officer of Liberty Reserve, Mark Marmilev was responsible for the infrastructure of a global payment processor and money transfer system that catered largely to criminals,” said U.S. Attorney Bharara. “With his guilty plea [Sept. 11], we are one step closer to holding to account everyone integrally involved in this sprawling Internet enterprise that served as a central financial institution for cyber criminals and illegal transactions of numerous kinds.”

Marmilev is scheduled for sentencing Dec. 12.

“The collapse of Liberty Reserve may have caused some headaches for the world’s cybercriminals, but its place has been taken by Bitcoin and other digital currency systems with built-in anonymity features,” noted John Hawes, on the Sophos Naked Security blog.

Written By

Click to comment

Expert Insights

Related Content

Cybercrime

Zendesk is informing customers about a data breach that started with an SMS phishing campaign targeting the company’s employees.

Cybercrime

The release of OpenAI’s ChatGPT in late 2022 has demonstrated the potential of AI for both good and bad.

Cybercrime

The FBI dismantled the network of the prolific Hive ransomware gang and seized infrastructure in Los Angeles that was used for the operation.

Cybercrime

A new study by McAfee and the Center for Strategic and International Studies (CSIS) named a staggering figure as the true annual cost of...

Cybercrime

Video games developer Riot Games says source code was stolen from its development environment in a ransomware attack

Cybercrime

CISA, NSA, and MS-ISAC issued an alert on the malicious use of RMM software to steal money from bank accounts.

Cybercrime

Chinese threat actor DragonSpark has been using the SparkRAT open source backdoor in attacks targeting East Asian organizations.

Application Security

PayPal is alerting roughly 35,000 individuals that their accounts have been targeted in a credential stuffing campaign.