Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Liberty Reserve Operators Plead Not Guilty in Scheme

Don't Miss Out —
Follow us on:

June 7 (Bloomberg) -- Two operators of Liberty Reserve SA pleaded not guilty to U.S. charges that they helped run the largest money-laundering scheme in history,

Vladimir Kats, a Liberty Reserve co-founder, and Mark Marmilev, who the U.S. said helped maintain the business infrastructure, made their first public court appearance since the U.S. announced the case on May 28. A May 24 appearance was held with the charges still under seal, U.S. District Judge Denise Cote said at yesterday’s arraignment in Manhattan.

“I arraigned them previously at that time under another indictment,” Cote said. “I now understand that each of the defendants had a superseding indictment that named them and them alone.”

When prosecutors told Cote that they intended to go to trial on the underlying indictment naming Kats and Marmilev together with five other individual defendants and Liberty Reserve, the judge said she would have to arraign the two men a second time. Both again pleaded not guilty.

“This is a unique set of circumstances, a unique experience at least for me,” Cote said.

Five of the seven men charged in the case were arrested on May 24, according to the office of Manhattan U.S. Attorney Preet Bharara. Kats, 41, and Marmilev, 33, both of Brooklyn, New York, are the only two in federal custody in New York. Two others are fugitives, the U.S. said.

‘Black-Market Bank’

Liberty Reserve, incorporated in Costa Rica in 2006, operated as “essentially a black-market bank,” and masked more than $6 billion of criminal proceeds, Bharara said on May 28 when he announced the case.

The company, which operated as one of the world’s most widely used digital-currency services, was structured “as a criminal business venture, one designed to help criminals conduct illegal transactions,” Bharara said.

The defendants are charged with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and operation of an unlicensed money transmitting business. Conspiracy to commit money laundering carries a term of as long as 20 years in prison.

Kats and Marmilev consented to being held without bail, said Cote who scheduled the next conference in the case for Aug. 9. Lawyers for both men declined to comment after court.

The case is U.S. v. Kats, 13-cr-00368, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.