Heather Morgan, also known as Razzlekhan, and her husband Ilya Lichtenstein, pleaded guilty on Thursday to orchestrating a mind-boggling money laundering scheme that shook the world of cryptocurrency. This modern-day Bonnie and Clyde first grabbed headlines when they were linked to the notorious 2016 theft of Bitfinex. The FBI, relentless in their pursuit, had successfully cornered and arrested the couple for their part in the heist in 2022. Through a well-executed search warrant, they managed to recover a significant portion of the stolen funds, marking it as the Justice Department’s largest financial seizure to date.
Prior to their plea deal, Morgan and Lichtenstein had not been formally implicated in the Bitfinex theft. However, it was Morgan’s arrest in 2022 that catapulted her into the viral spotlight. With her ludicrous rap persona, she branded herself as a “bad-*ss money maker” and “the crocodile of Wall Street.” In her wild online presence, she claimed to be an economist, serial entrepreneur, software investor, and rapper while shamelessly promoting her crypto-rap career.
The couple’s devious plan involved splitting the stolen Bitcoin into small amounts and transferring them to thousands of crypto wallets using fake identities. To make their ill-gotten gains appear legitimate, they mixed the stolen funds with other criminal virtual currencies on Alphabay, a darknet marketplace. Moreover, they cleverly created shell companies to further obfuscate the origins of their stolen Bitcoin. The Justice Department revealed that Lichtenstein, utilizing advanced hacking tools and techniques, gain access to Bitfinex’s network. This enabled him to authorize over 2,000 fraudulent transactions, resulting in the transfer of a staggering 120,000 Bitcoin to a controlled cryptocurrency wallet.
Covering their tracks, Lichtenstein then proceeded to delete access credentials and any log files that could have exposed his true identity. In a cunning move, he enlisted Morgan to ensure the successful laundering of the stolen funds. Unfortunately for the duo, their downfall came when they used the stolen Bitcoin to purchase Walmart vouchers, inadvertently leaving behind a traceable trail that led authorities straight to their Manhattan apartment.
According to Jonathan Levin, the founder of cryptocurrency investigators Chainalysis, the link between the Walmart gift cards and the Bitfinex hack initiated a deeper investigation. Levin explained that the couple’s attempts to move the funds across multiple exchanges and cryptocurrencies failed to create the intended break in provenance. In a raid on their Manhattan apartment, the police discovered stolen funds with an estimated value of approximately $3.6 billion. They also seized $40,000 in cash, numerous burner phones meticulously hidden within hollowed-out books, and a decrypted spreadsheet revealing their elaborate money laundering methods.
Prosecutors claimed that Morgan and Lichtenstein’s communication records indicated plans to flee to either Ukraine or Russia, Lichtenstein’s home country, as revealed in court documents seen by Gizmodo. US District Judge Colleen Kollar-Kotelly accepted the couple’s guilty pleas. Lichtenstein is currently held in jail awaiting sentencing after pleading guilty to conspiracy to commit money laundering, which carries a maximum sentence of 20 years. Morgan, on the other hand, pleaded guilty to one count of money laundering and one count of conspiracy to defraud the U.S. She remains under house arrest, awaiting her sentence, which could result in a maximum of five years in prison for each count.
Author: Ryan Scott
Just a guy
