A manager of Liberty Reserve SA, described by the U.S. as a “black-market bank” that masked more than $6 billion in criminal proceeds, pleaded guilty to conspiracy and operating an illegal money remitting business.
Azzeddine El Amine, 47, of Costa Rica, a principal deputy to the company’s founders, entered his plea today before U.S. District Judge Denise Cote in Manhattan. The judge said El Amine is cooperating with the U.S., which she will take into consideration when she sentences him. He faces a maximum of 30 years in prison, Cote said.
El Amine was one of seven people charged by the office of Manhattan U.S. Attorney Preet Bharara’s office in May 2013 . He remains in custody
“I admit that I was involved in a conspiracy to commit money laundering,” El Amine told Cote today. He said that he worked as an assistant to Arthur Budovsky, a Liberty Reserve founder, and that the firm moved money for criminals.
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,” Bharara said. Federal enforcement actions by prosecutors in New York shut down the company last year.
Asked by Cote today what kind of criminal activity Liberty Reserve facilitated, El Amine said, “credit card fraud and Ponzi schemes.”
Budovsky is in Spain where his extradition is pending, Bharara’s office said. Two men are set to go to trial in April: Maxim Chuckharev, who was Liberty Reserve’s designer, and Mark Marmilev, who also worked as a designer and operator of the firm.
Two others, Allan Hidalgo and Ahmed Yassine, both Costa Rican citizens who are described by the U.S. as operators of Liberty Reserve, aren’t subject to extradition and haven’t been arrested, the U.S. said.
In October, Vladimir Katz, who co-founded the digital currency service with Budovsky, pleaded guilty to money laundering and operating an unlicensed money-transmitting business.
Liberty Reserve had an estimated 1 million users around the world and conducted a total of about 55 million transactions -- virtually all of them illegal -- including 200,000 in the U.S., Bharara said. U.S. investigators have found that criminal rings used Liberty Reserve to distribute illicit proceeds from Vietnam, Nigeria, Hong Kong, China and the U.S.
The company helped users launder illegal proceeds 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.
Liberty Reserve was designed to help evade the scrutiny of U.S. authorities because unlike traditional banks or legitimate online payment processors, it didn’t require users to validate their identity, prosecutors said. Accounts could be opened under fictitious names and residences such as “Joe Bogus,” with an address listed as “123 Fake Main Street,” the U.S. said.
Leo Kimmel, El Amine’s lawyer, declined to comment on his client’s case after court.
The case is U.S. v. Kats, 13-cr-00368, U.S. District Court, Southern District of New York (Manhattan).