A New York couple describing themselves as “serial entrepreneurs” have been arrested and charged with conspiracy to commit money laundering and to defraud the U.S. government in relation to a $4.5 billion Bitcoin heist in 2016.
MarketWatch reports that a New York couple who described themselves as “serial entrepreneurs” have been arrested in relation to a 2016 Bitcoin heist worth around $4.5 billion. Ilya Lichtenstein, 34, and Heather Morgan, 31, were arrested this week after federal prosecutors charged them with conspiracy to commit money laundering and to defraud the U.S. government. The couple has not been charged with actually perpetrating the 2016 Bitfinex heist yet.
Lichtenstein is a dual U.S. and Russian citizen who is reportedly engaged to Morgan, who describes herself as a “serial entrepreneur” and is originally from California. Morgan also states that she is an “irreverent comedic rapper,” who performed under the name Razzlekhan, “the infamous crocodile of Wall Street.”
In 2016, hackers made off with around 120,000 Bitcoin worth $71 million at the time. At today’s value, the heist would be worth around $4.5 billion. Lichtenstein and Morgan had reportedly struggled for the past five years to launder their stockpiles of Bitcoin, according to prosecutors. The couple had managed to launder around 20 percent of it but investigators say they have seized around 90,000 Bitcoin worth $3.6 billion last week from virtual wallets owned by the couple.
Attorney Rachel Fiset, of Zweiback, Fiset and Coleman, who specializes in complex financial fraud cases commented: “As the value of the money grew, this likely became a far more complex scheme than they believed they were getting into when it started. It was going to catch up to them at some point because the pot just kept growing. You can’t just hold a few billion dollars for five years unnoticed.”
According to prosecutors, the couple tried to use accounts linked to their startup companies to launder their Bitcoin. Morgan reportedly approached the bank holding her account for her company SalesFolk, a cold-email copywriting company, and said that her clients were asking to send payment in Bitcoin and also had some Bitcoin given to her by Lichtenstein she wished to take out of “cold storage” to finance business expansion. Prosecutors say that the Bitcoin in her accounts was stolen from Bitfinex.
Lichtenstein similarly transferred $2.9 million in Bitcoin into accounts for companies he ran called Endpass and Demandpath. While the couple claimed the transfers were legitimate business transactions, prosecutors say they actually employed “numerous sophisticated laundering techniques.”
Read more at MarketWatch here.