Liberty Reserve’s Designer Cops to Conspiracy


     MANHATTAN (CN) – Breaking from the script of his carefully-worded guilty plea, Mark Marmilev, 35, described some of the more mundane priorities he had in helping design and operate a website that prosecutors call a “bank of choice for the criminal underworld.”
     “I was trying to create a structure that was stable,” said Marmilev, whose dark navy prison uniform contrasted his pale complexion and shaved head.
     After telling the judge he worked to make Liberty Reserve “accessible to blind people,” Marmilev added, “I was trying to protect it from hackers, identity thieves.”
     It was an ironic concern for a website alleged to have been used in laundering more than $6 billion by facilitating “a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking,” according to the federal indictment of its associates.
     Marmilev revealed little else about his role in designing and operating Liberty Reserve while pleading guilty to conspiracy during a roughly hour-long hearing on Thursday afternoon.
     When asked to describe his education, Liberty Reserve’s chief designer replied, “I almost finished college.”
     U.S. District Judge Denise Cote read Marmilev the rights that he would forfeit, and the penalties he faced, for his guilty plea. He admitted to one charge of the three-count indictment: conspiracy to operate an unlicensed money transmitting business.
     Marmilev did not plead to the other two counts, conspiring to launder money and operating the unlicensed business.
     Standing next to his attorney, Marmilev read a legalistic paragraph, acknowledging that he violated a federal statute. He said that he believed a “substantial amount of money came from U.S. sources that were running high-yield funds” that he believed were “likely to be fraudulent.”
     “I consciously avoided obtaining confirmation” that the transactions were illegal, he said.
     “Conscious avoidance,” in legal parlance, is when a criminal defendant tries not to learn whether he is breaking a law in an effort to shield himself prosecution and conviction.
     Marmilev’s more mundane description of his activities with Liberty Reserve came during a back-and-forth with the judge later in the hearing.
     His guilty count carries a possible 5-year sentence with an additional three years of supervised release.
     All three charges carry a potential 20-year sentence for the remaining defendants, including Liberty Reserve’s founder Arthur Budovsky, whose extradition from Spain remains pending.
     Manhattan U.S. Attorney Preet Bharara celebrated the case’s third conviction.
     “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,” he wrote in a press release. “With his guilty plea today, 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.”
     

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