Maxim Chukharev leaded guilty to conspiring to operate an illegal unlicensed money transmitting business.
The head of technology for Liberty Reserve, an alternative digital currency used in what authorities called a massive global fraud scheme, has pleaded guilty to criminal charges.
Maxim Chukharev, 28, of Costa Rica, pleaded guilty on Tuesday in a United States federal court to conspiring to operate an illegal unlicensed money transmitting business. He faces a maximum penalty of five years in prison.
Chukharev was one of seven people charged in May 2013, when US authorities announced they had shut down what was described as one of the world’s biggest money-laundering schemes.
Investigators said the scheme laundered more than US$6 billion in criminal proceeds between 2006 and 2013 by establishing accounts using the alternative Liberty Reserve currency.
The digital exchange mechanism, which allowed depositors to mask their identities, was similar to bitcoin and other digital currencies.
“Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld,” a US Justice Department statement said.
It “was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes”, the statement added.
Liberty Reserve’s principals were arrested in a round-up last year in Costa Rica, Spain and New York, sealing the fate of a company that had been one of the most successful in the popular but increasingly scrutinised world of unofficial banking and virtual currencies.
The indictment accused Liberty Reserve founder Arthur Budovsky – a former US citizen who took Costa Rican nationality – and his partners of creating a firm that masqueraded as a convenient and legitimate money-transfer system.
Before being shut down, Liberty Reserve had more than a million users worldwide.
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