14 DAY TRIAL // 41-year-old Vladimir Kats has pleaded guilty to operating an unlicensed money transmitting business and money laundering. Kats is the co-founder of Liberty Reserve, the Costa Rica- based payment processor that’s said to have helped numerous criminals with laundering money and making illegal transactions anonymously.
“Vladimir Kats, by his own admission, helped to create and operate an anonymous digital currency system that provided cybercriminals and others with the means to launder criminal proceeds on an unprecedented scale,” commented Acting Assistant Attorney General Mythili Raman.
“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.”
According to the US Department of Justice, Kats has been actively involved with the company until 2009. He was arrested in May 2013 in Brooklyn, N.Y.
He has pleaded guilty to several offenses, including conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business, and operating an unlicensed money transmitting business. He has also pleaded guilty to one count of receiving illegal child molestation content, and even marriage fraud.
The date of the sentencing has not been scheduled yet. However, each of these crimes carries a maximum sentence between 5 and 40 years in prison.
“As a co-founder and operator of Liberty Reserve, Vladimir Kats served as a global banker for criminals, giving them an anonymous, online forum to hide the proceeds of their illegal and dangerous activities,” stated US Attorney Preet Bharara of the Southern District of New York.
“With his guilty plea today, we take a significant step toward punishing those responsible for creating and running this international den of cybercrime.”
Liberty Reserve was shut down earlier this year when US authorities seized its Internet domains and arrested its founder, Arthur Budovsky Belanchuk.
Authorities say the service has been utilized to make around 55 million transactions. Criminals are said to have used it to launder over $6 billion (€4.4 billion) obtained through identity theft, credit card fraud, hacking, drug trafficking and investment fraud.