Prosecutors mentioned the couple took actions that appeared ripped from a "spy novel."
AP
The eccentric couple charged with laundering billions of dollars’ price of hacked bitcoin used methods that had been “pulled from the pages of a spy novel” — with monetary accounts in Russia and Ukraine, faux identities and a “contingency plan” to flee abroad, the feds mentioned in courtroom paperwork.
Prosecutors warned Ilya “Dutch” Lichtenstein, 34, and his novice rapper girlfriend Heather Morgan, 31 — who're charged with laundering $4.5 billion in crypto stolen in a 2016 hack — ought to stay in custody till their trial given “extremely troubling” entry to a whole lot of hundreds of thousands of dollars in cryptocurrency, abroad connections and faux identities.
“Having now been charged and seeing the power of the case, the defendants’ incentive to flee is dramatically elevated,” the prosecutors mentioned. “In brief, no situation or mixture of circumstances can reliably guarantee the looks of such refined defendants with the means to flee and ample incentive to take action.”
The feds allege that Lichtenstein and Morgan have “entry to quite a few fraudulent identities and paperwork bought on the darknet, and the power to simply purchase extra.” The paperwork famous that the couple appeared to “have been establishing a contingency plan for a life in Ukraine and/or Russia previous to the COVID-19 pandemic.”
The paperwork additionally contained particulars on a federal raid of the couple’s New York residence in January, throughout which Morgan tried to lock her cellphone whereas pretending to retrieve her cat and authorities “needed to wrest” the system from her palms.
“Morgan additionally seemed to be making an attempt to intrude with regulation enforcement’s search of the defendants’ residence by grabbing for and making an attempt to lock her cellphone below the pretense of retrieving her cat,” the paperwork mentioned.
Through the raid, brokers discovered a a number of telephones and SIM playing cards, together with a bag labeled “Burner Cellphone.” In whole, the feds discovered greater than 50 digital gadgets on website.
Moreover, prosecutors mentioned authorities discovered “two hollowed-out books” in Lichtenstein’s workplace, in addition to greater than $40,000 in money and “what seems to be a considerable quantity of international foreign money.”
Prosecutors famous that Lichtenstein used digital foreign money to purchase “over 70 one-ounce gold cash” by a valuable metals seller, however regulation enforcement didn’t discover a “single gold coin” throughout raids on the couple’s residence and storage unit.
The submitting additionally poked enjoyable on the couple, noting “bluster” of their request for bail and disputing what prosecutors described as an try by the protection to “painting defendant Morgan as an unwitting bystander” regardless of her “integral position” within the scheme.
In a piece labeled “suspicious Ukraine exercise,” prosecutors mentioned the defendants took a month-long journey to Ukraine in 2019. Recordsdata on Lichtenstein’s cloud storage account contained monitoring numbers suggesting shipments arrived within the nation whereas they had been there and a doc written in Russian on “the right way to anonymously obtain a parcel in Ukraine.”
The cloud account had a folder titled “personas,” with subfolders titled “RU” for Russia and “UA” for Ukraine. The folders purportedly contained ID documentation for “quite a few people,” each female and male.
Morgan and Lichtenstein are accused of conspiring to launder 119,754 bitcoin they pilfered when a hacker breached crypto trade Bitfinex in 2016. They face 25 years in jail.
A self-described entrepreneur, Morgan additionally rapped below the identify “Razzlekhan” and dubbed herself the “Crocodile of Wall Road.” She as soon as penned a Forbes column by which she warned of “cybercriminals and fraudsters” making the most of the COVID-19 pandemic.
Morgan and Lichtenstein purportedly spent the proceeds from their laundering scheme on numerous purchases, together with a $500 Walmart reward card, the aforementioned gold cash and NFTs, in accordance with the felony criticism.
The Justice Division mentioned it has captured $3.6 billion in cryptocurrency from the Bitfinex hack in its “largest monetary seizure ever.”
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