Liberty Reserve figure admits guilt

Maxim Chukharev, a figure in the Liberty Reserve case, pleaded guilty Tuesday in U.S. District Court in Manhattan, said the U.S. Attorney’s Office for the Southern District of New York. The former Costa Rican resident faces a possible five years in prison at sentencing Jan. 30.

He admited one count of conspiring to operate an unlicensed money transmitting business. The U.S. Attorney’s Office described him as an information technology manager for Liberty Reserve.

According to allegations contained in the indictment filed against Liberty Reserve, Chukharev, and six other individual defendants, and statements made in related court proceedings:

“Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s largest payment processor and money transfer system. Liberty Reserve was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. It emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity.

“Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals around the world to conduct anonymous and untraceable financial transactions.

“Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking, and other crimes.”

Chukharev was an associate of Liberty Reserve founder Arthur Budovsky and was responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s chief technology officer, for maintaining Liberty Reserve’s technological infrastructure, said prosecutors.

Chukharev is among seven individuals charged in the indictment, which was unsealed on May 28, 2013. Three co-defendants, Vladimir Kats, Azzeddine el Amine, and Mark Marmilev, previously pled guilty and await sentencing. The indictment also charged Liberty Reserve with conspiracy to commit money laundering and operation of an unlicensed money transmitting business, and those charges remain pending.

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