Cryptocurrency fraud: Couple accused of laundering $ 4.5 billion arrested

 

On Tuesday, federal prosecutors said a married couple was arrested in Manhattan for allegedly trying to launder about $ 4.5 billion in cryptocurrencies stolen during a massive hack in 2016. 

Ilya "Dutch" Lichtenstein, 34, and his rapper wife, Heather Morgan, 31, are accused of trying to launder 119,754 bitcoin proceeds that were embezzled when a hacker broke into Bitfinex's virtual currency exchange platform systems.

The stolen cryptocurrencies were reportedly transferred to a digital wallet controlled by Lichtenstein, who describes himself as a "technology businessman, developer, and investor" on his LinkedIn account. He and his wife, a self-proclaimed "multi-idea businessman" and "surreal rapper-creator," transferred the funds to their accounts through "a complicated money laundering process," prosecutors said.

According to the investigation, the couple allegedly spent the illicit proceeds on gold, NFTs, and $ 500 worth of Walmart gift cards. 

As part of the plan, the duo allegedly "used numerous sophisticated laundering techniques," including setting up online accounts with fake IDs and transferring money through the shady network.

Prosecutors said the couple had a bag of disposable smartphones in their Manhattan apartment and Lichtenstein, a Russian-US citizen with a dual passport.

The Justice Department said special agents recovered over $ 3.6 billion in bitcoin stolen during the Bitfinex invasion, the most significant financial seizure ever.

"Today's arrests and the largest financial seizure in the department's history show that cryptocurrencies are not a haven for criminals," said Deputy Attorney General Lisa Monaco. Bitfinex said it was working with the Department of Justice to "consolidate the rights to return the stolen bitcoins."

Lichtenstein and Morgan face charges of money laundering conspiracy and US fraud. If convicted of both charges, each could face up to 25 years in prison.

The couple got married last year.

 They got engaged in 2019.

 According to a Facebook post by Lichtenstein, in which he wrote that his bride was "his best friend and the woman of his dreams" and "not just a tech entrepreneur" but also a "fearless" rapper. "

Morgan has released a series of rap songs called "Razzlekhan," an alter ego described on its website as "Genghis Khan, but with more pizzazz (being exciting and charming together)." She also offers productivity tips, according to her Instagram.

In a bizarre 2019 music video titled "Rap Anthem for Misfits & Weirdos: Versace Bedouin Music Video," Morgan appears to be leaping on Wall Street in a gold jacket, leopard scarf, sunglasses, and hat while rapping: 

Go too far, but I need to figure out where I'm going. "I'm the mother crocodile of Wall Street." She also has a song called "I get to the cemetery."

Judge Debra Freeman had already set conditions for Lichtenstein and Morgan to be remanded in custody when the couple first appeared in federal court in Lower Manhattan on Tuesday night.

The amount for Lichtenstein was set at $ 5 million with five co-signatories as witnesses, with his parents' house also being declared as a pawn and house arrest with electronic surveillance.

The amount for Morgan was set at $ 3 million, with two co-signers and house arrest, as well as a watch for ongoing monitoring.

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