HEATHER Morgan aka the ‘Crocodile of wall Street’ and her husband Ilya Lichtenstein were arrested yesterday after the Justice Department recovered $3.6 billion in stolen Bitcoin found in the couple’s digital wallets.
Prosecutors say the couple had been laundering huge sums of stolen crypto related to the 2016 hack of Bitfinex exchange, which was one of the largest crypto heists ever recorded. The 2,000 unauthorised transactions at the time were valued at $71 million in Bitcoin, but with the currency’s rise in value since then, the sum has increased to over $4.5 billion.
The recovery of roughly $3.6 billion in tokens from Morgan and Lichtenstein is the largest financial seizure the Justice Department has ever seen, and the couple have been charged with conspiracy to commit money laundering and conspiracy to defraud the United States of America.
The Justice Department has not charged the couple with perpetrating the hack, but rather receiving and laundering the stolen funds.
Morgan and Lichtenstein live on Wall Street in lower Manhattan and the story is made even more strange by the couple’s bizarre online personas. Morgan has tried her hand at rapping under the name Razzlekhan and describes herself as “an expert of persuasion, social engineering, and game theory”.
In her 2019 single Versace Bedouin, the self-proclaimed ‘Crocodile of Wall Street’ raps: “I’m many things, a rapper, an economist, a journalist, a writer, a CEO, and a dirty, dirty, dirty, dirty ho”.
Morgan was also a contributor to Forbes at one time, and her bio reads: “When she’s not reverse-engineering black markets to think of better ways to combat fraud and cybercrime, she enjoys rapping and designing streetwear fashion.”
Her husband Ilya Lichtenstein, who goes by the name of ‘Dutch’, is a citizen of both Russia and the US and is the co-founder of an online marketing firm. Both appeared in a Manhattan federal court last night and were granted bail at $3 million for Morgan, whose parents have been asked to post their home as security, and $5 million for Lichtenstein.
“Today´s arrests, and the Department´s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Deputy Attorney General Lisa Monaco said in a statement.
“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 the form it takes.”
Bitfinex said in a statement that it was working with the Department of Justice to “establish our rights to a return of the stolen bitcoin”.
Morgan will have to put her rap career on hold for the foreseeable if she is found guilty. According to the Justice Department, she and Lichtenstein face a maximum sentence of 20 years in federal prison for the money laundering charge, plus five more for conspiring to defraud the U.S. government.