Liberty Reserve co-founder pleads guilty to money laundering

Liberty Reserve co-founder pleads guilty to money laundering

The co-founder of Liberty Reserve, a digital currency outfit described by authorities as the criminal underworld's "bank of choice", has pleaded guilty to money laundering charges.

Vladimir Kats admitted to charges of money laundering and operating an unlicensed money transmitting business in Manhattan Federal Court.

Incorporated in Costa Rica in 2006, Liberty Reserve is alleged to have laundered more than $6 billion in criminal proceeds over the years. The service had more than one million users around the world, who made around 55 million transactions through its systems, laundering proceeds from crime including credit card fraud, identity theft, computer hacking, child pornography, and narcotics trafficking.

In an international operation in May, authorities shut down the service and arrested five people, among them principle founder Arthur Budovsky, who was picked up in Spain, and Kats.

Kats, who helped run Liberty Reserve in its early days but left in 2009, was arrested in Brooklyn and has now pleaded guilty to several charges, including conspiracy to commit money laundering, which carries a maximum 20 years jail term. A sentencing date has not yet been set.

Acting Assistant Attorney General Mythili Raman says of Kats: "His conviction reinforces what we said when Liberty Reserve was first brought down: banking systems that allow criminals to conduct illegal transactions anonymously will not be allowed to stand, and professional money launderers will be brought to justice."

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