‘Black Market Bank’ Former IT Manager Gets 3 Years in Prison

Updated on

The former information technology manager of Liberty Reserve SA was sentenced to three years in prison for his work at what prosecutors called a “black-market bank” that masked more than $6 billion in criminal proceeds.

Maxim Chukharev, who pleaded guilty in September to conspiring to run an unlicensed money-transmitting business, was sentenced Friday by U.S. District Judge Denise Cote in Manhattan federal court.

Chukharev, who was extradited to the U.S. from Costa Rica, has already spent 20 months in custody. With credit for the time served, the 28-year-old is likely to be released in less than a year.

Under a plea agreement with the government, Chukharev faced a maximum of five years in prison. His lawyer, Sarah Kunstler, told Cote that her client didn’t know the company was breaking the law until after he started working there.

“When he took a job with Liberty Reserve, he thought it was a legitimate company,” Kunstler said. “He thought that he had found a career.

Kunstler told Cote the Costa Rican prison where Chukharev spent 10 months before being sent to the U.S. was ‘‘a living hell’’ due to overcrowding. She asked the judge to sentence him to the time he’s already served.

Computer Infrastructure

Chukharev worked with the company’s former chief technology officer, Mark Marmilev, at Liberty Reserve in Costa Rica to maintain computer infrastructure, the U.S. Justice Department said. Marmilev pleaded guilty and was sentenced to five years.

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., according to Manhattan U.S. Attorney Preet Bharara.

Investigators found that criminal rings used Liberty Reserve to distribute illicit proceeds from Vietnam, Nigeria, Hong Kong, China and the U.S., according to prosecutors.

The company helped users launder money from crimes or transfer funds among associates, the government said. Liberty Reserve’s digital currency was used by people committing identity theft, credit-card fraud, computer hacking, child pornography and narcotics trafficking, according to prosecutors.

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

(Updates with defense lawyer’s comment in fifth paragraph.)
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