Two operators of Liberty Reserve SA, accused by the U.S. of helping to run the largest money-laundering scheme in history, pleaded not guilty to federal charges.

Vladimir Kats, a Liberty Reserve co-founder, and Mark Marmilev, who the U.S. said helped maintain the business infrastructure, made their first public court appearance since the U.S. announced the case on May 28. A May 24 appearance was held with the charges still under seal, U.S. District Judge Denise Cote said at todays arraignment in Manhattan.

I arraigned them previously at that time under another indictment, Cote said. I now understand that each of the defendants had a superseding indictment that named them and them alone.

When prosecutors told Cote that they intended to go to trial on the underlying indictment naming Kats and Marmilev together with five other individual defendants and Liberty Reserve, the judge said she would have to arraign the two men a second time. Both again pleaded not guilty.

This is a unique set of circumstances, a unique experience at least for me, Cote said.

Five of the seven men charged in the case were arrested on May 24, according to the office of Manhattan U.S. Attorney Preet Bharara. Kats, 41, and Marmilev, 33, both of Brooklyn, New York, are the only two in federal custody in New York. Two others are fugitives, the U.S. said.

Liberty Reserve, incorporated in Costa Rica in 2006, operated as essentially a black-market bank, and masked more than $6 billion of criminal proceeds, Bharara said on May 28 when he announced the case.

The company, which operated as one of the worlds most widely used digital-currency services, was structured as a criminal business venture, one designed to help criminals conduct illegal transactions, Bharara said.

The defendants are charged with conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and operation of an unlicensed money transmitting business. Conspiracy to commit money laundering carries a term of as long as 20 years in prison.

Kats and Marmilev consented to being held without bail, said Cote who scheduled the next conference in the case for Aug. 9. Lawyers for both men declined to comment after court.

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Liberty Reserve Operators Plead Not Guilty in Scheme