CTO for Liberty Reserve payment network pleads guilty

Mark Marmilev of Brooklyn maintained the technical infrastructure for Liberty Reserve's operations

The CTO of a Costa Rica-based payment network that U.S. prosecutors allege primarily served the cybercriminal underworld pleaded guilty on Thursday to one count of conspiring to operate an unlicensed money transmitting business.

Mark Marmilev, 35, of Brooklyn, could face a maximum of five years in prison, according to a news release from the U.S. Attorney for the Southern District of New York.

Marmilev was accused of designing and maintaining the systems of Liberty Reserve, a digital currency used by a million people worldwide until it was shut down in May 2013. Prosecutors allege that Marmilev knew Liberty Reserve was transmitting funds that came from criminal activity.

Liberty Reserve transmitted US$6 billion worth of transactions from its launch in 2006, mostly with the intent to launder criminal funds from activities such as credit card fraud, identity theft, hacking and narcotics trafficking, the indictment said.

The company functioned "as a 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," prosecutors said.

Marmilev was one of seven people indicted. Two others, Vladimir Kats and Azzeddine el Amine, have pleaded guilty to charges and are awaiting sentencing.

Liberty Reserve did not require its customers to present identification, allowing them to stay anonymous or use fake names. Third-party exchangers bought and sold credits from Liberty Reserve in exchange for mainstream currency.

Those exchangers, mostly in Malaysia, Russia, Nigeria and Vietnam, dealt directly with customers, according to the indictment. That arrangement ensured that Liberty Reserve never collected identifying information on its users.

In 2009, Costa Rican authorities pressed Liberty Reserve for a license to operate as a money transmitter. It failed to obtain the license after regulators in the country determined it did not use anti-money laundering controls and had no means to track suspicious activity.

It was finally shut down in May 2013 after Liberty Reserve allegedly engaged in various deceptions, including moving money outside of Costa Rica into the accounts of shell companies and claiming it was shutting down its business.

Send news tips and comments to jeremy_kirk@idg.com. Follow me on Twitter: @jeremy_kirk

Join the CSO newsletter!

Error: Please check your email address.

Tags CriminalsecuritylegalLiberty Reservecybercrime

More about

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Jeremy Kirk

Latest Videos

  • 150x50

    CSO Webinar: Will your data protection strategy be enough when disaster strikes?

    Speakers: - Paul O’Connor, Engagement leader - Performance Audit Group, Victorian Auditor-General’s Office (VAGO) - Nigel Phair, Managing Director, Centre for Internet Safety - Joshua Stenhouse, Technical Evangelist, Zerto - Anthony Caruana, CSO MC & Moderator

    Play Video

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

More videos

Blog Posts

Market Place