On Thursday, a husband-and-wife team admitted to laundering money through a complex plot that involved burying gold coins and setting documents on fire in a trash can in Kazakhstan using funds taken in a 2016 breach of the cryptocurrency exchange Bitfinex.
At a hearing before U.S. District Judge Colleen Kollar-Kotelly in Washington, Ilya Lichtenstein, a Russian-born resident of the United States, acknowledged to hacking the exchange and using his wife, an online rapper by the name of Heather Morgan who went by the nickname “Razzlekhan,” to assist hide 119,754 stolen bitcoin.
At the time of the breach, the tokens were worth $71 million, but by the time the hackers were apprehended in New York on February 22, their value had increased to more than $4.5 billion.
The $3.6 billion in assets recovered, according to then-Deputy Attorney General Lisa Monaco, represented the largest financial seizure in the history of the U.S. Department of Justice. Since then, the DOJ has seized an additional $475 million, and the couple on Thursday agreed to jointly forfeit $72 million in court.
The 35-year-old Lichtenstein lists himself as a technology entrepreneur on his LinkedIn site and has a psychology degree.
Prosecutor Christopher Brown, however, asserted that Lichtenstein also had a lengthy history of hacking, including while still a minor, and had previously taken money from virtual currency exchanges.
Brown claimed that after Lichtenstein hacked the exchange, Morgan—whose hip-hop alias has been compared to Genghis Khan but with more “pizzazz”—helped him create accounts with false identities to help conceal proceeds.
Lichtenstein stated the judge that it was done on his orders.
Lichtenstein admitted changing some money into gold coins, which he delivered to Morgan and had them interred in a Californian cemetery. According to a prosecutor, law enforcement has since discovered them.
Documents being burned raise suspicions
In a separate plea hearing, Morgan, 33, claimed her husband first admitted to hacking the exchange in 2020, although she had long had suspicions that his money came from an illegal source, such as drug sales or tax avoidance.
She claimed the couple travelled to Ukraine and Kazakhstan for tourism and to generate business for a firm they owned.
But she was alarmed when she witnessed Lichtenstein burning documents in a garbage can during a visit to Kazakhstan.
Morgan claimed, When she questioned him about it, he was evasive.
According to the prosecution, Lichtenstein actually utilized the journeys to meet with money mules who changed cryptocurrencies into official currency and then deposited it in banks in Russia and Ukraine. The money would subsequently be taken out of the American accounts by Lichtenstein and Morgan.
There was no schedule for sentencing. In a late July plea agreement, both defendants consented to cooperate with the U.S. Attorney’s office in Washington.
Prior to the conclusion of Lichtenstein’s plea hearing, his attorney Samson Enzer requested permission for his client, who is still in custody, to communicate with Morgan, who was present in the courtroom audience and was out on bail.
They were informed by a US Marshals Service agent that interaction was forbidden.
Then Lichtenstein turned to face Morgan while puckering his lips as if to blow a kiss, wearing a dark green T-shirt with the word “prisoner” written on the back. As he was being brought from the courthouse, Morgan waved back.
