‘Bitcoin Bonnie & Clyde’ Go To Jail

Uploaded on 2023-08-21 in FREE TO VIEW, GOVERNMENT-Law Enforcement

A husband and wife cyber crime team have pleaded guilty to trying to launder $4.5bn (£3.5bn) of Bitcoin that he had stolen in a hack in 2016. This was the US’s biggest-ever crypto-currency theft case.

Heather Morgan and Ilya Lichtenstein were arrested last year in Manhattan, New York after police traced their riches back to the crypto heist. While evading police, Morgan masqueraded as a rapper and tech entrepreneur. As part of a plea deal, Lichtenstein admitted he was behind the hack.

US Deputy Attorney General Lisa Monaco said, “Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals... In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”

Lichtenstein has pleaded guilty to conspiracy to commit money laundering, which could land him a maximum sentence of 20 years in prison. His wife has also pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States. Both counts carry a max of five years in prison, which means that Morgan could serve up to 10 years in jail.

The couple both pleaded guilty to money laundering, but Morgan pleaded guilty to an additional count of conspiracy to defraud the United States.

In spite of attempting to cover up her crimes, Morgan published dozens of expletive-filled music videos and rap songs filmed in locations around New York, under the name Razzlekhan.

Morgan also had sidelines in the painting, fashion design and writing worlds, where she pitched herself as a kind of corporate coach. One of her recent pieces was titled, in part, “Tips to Protect Your Business from Cybercriminals” and featured an interview with a cryptocurrency exchange owner about how to prevent fraud. In her lyrics she called herself a "bad-ass money maker" and "the crocodile of Wall Street".

Morgan also claimed to be a successful tech businesswoman, calling herself an "economist, serial entrepreneur, software investor and rapper". But while developing her rapping and tech persona, she and her computer programmer husband were attempting to cash out their fortune stolen from the crypto firm Bitfinex.

The couple now face prison sentences with Lichtenstein in line for a possible maximum 20 years in prison and Morgan a possible 10.

At the time of their arrest their theft of 119,000 Bitcoins was worth about $4.5bn, making it the US Department of Justice's largest single financial seizure in its history. When the hack was carried out, the Bitcoins were worth about $71m.

Court documents showed in detail how the couple cashed out millions of dollars of the Bitfinex Bitcoins into traditional money using sophisticated techniques to try to stay under the radar. The successful police operation is the latest case to utilise tools able to analyse transactions on Bitcoin's public blockchain ledger. One of the couple's key mistakes was shopping with Walmart supermarket vouchers paid for with the stolen funds.

Police successfully decrypted a spreadsheet meticulously detailing the couple's intricate methods for laundering the stash, allowing them to recover nearly the full amount.

Prosecutors say they uncovered communication records that indicate Morgan and Lichtenstein were planning to flee the US for Russia, which is his country of birth. If successful, they would have probably lived a billionaire lifestyle, safe from arrest by the US.

BBC: Yahoo: The Guardian: U.S. Dept of Public Affairs: The Times: Yahoo: Metro

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