Razzlekhan And Her Husband Were Found Guilty Of $4.5 Billion In Bitcoin Laundering

A husband and wife cyber-crime team pled guilty to attempting to launder $4.5 billion (£3.5 billion) in Bitcoin stolen in a 2016 breach.

Heather Morgan and Ilya Lichtenstein were detained in New York last year after investigators linked their wealth to the crypto crime.

Morgan pretended to be a rapper and a software entrepreneur to avoid capture.

Lichtenstein admitted to being the hacker as part of a plea bargain.

The pair both pleaded guilty to money laundering, but Morgan also admitted to conspiracy to defraud the United States.

Despite her attempts to conceal her crimes, Morgan released dozens of expletive-laden music videos and rap songs shot in New York under the alias Razzlekhan.

She referred to herself as a “bad-ass money maker” and “the crocodile of Wall Street” in her lyrics.

Morgan promoted herself as a “economist, serial entrepreneur, software investor, and rapper” in Forbes articles.

However, she and her computer programmer husband were seeking to cash out their riches stolen from the crypto business Bitfinex while establishing her rapping and tech identity.

The couple now faces prison sentences, with Lichtenstein facing up to 20 years in prison and Morgan facing up to ten.

The hoard of 119,000 Bitcoins was valued around $4.5 billion at the time of their arrest in February 2022, making it the greatest single financial seizure in US Department of Justice history.

The Bitcoins were worth approximately $71 million at the time of the hack.

Court filings detailed how the pair converted millions of dollars in Bitfinex Bitcoins into regular currency using clever strategies to keep under the radar.

According to public records, the couple is:

Create shell corporations to make Bitcoin funds appear legitimate.
The successful police operation is the most recent example of the use of tools capable of analyzing transactions on Bitcoin’s public blockchain record.

One of the couple’s biggest blunders was using stolen monies to purchase Walmart store vouchers.

“Police were able to link the Walmart gift cards back to some of the proceeds of the Bitfinex hack, which then opened up the further investigation,” Jonathan Levin, founder of cryptocurrency investigators Chainalysis, which was involved in the probe, stated.

“Buying gift cards and moving between exchanges and different cryptocurrency never actually created this sort of break in provenance that the couple intended,” he added.

Police raided the couple’s Manhattan flat and discovered hollowed-out books designed to conceal mobile phones.

In addition, they uncovered dozens of burner handsets, many USB drives, and $40,000 in cash.

The couple allegedly attempted to conceal burner phones in their flat. Police successfully decrypted a spreadsheet painstakingly describing the couple’s complex tactics for laundering the hoard, allowing them to recover virtually the whole amount.

Prosecutors claim in court documents that they discovered contact records indicating Morgan and Lichtenstein were intending to depart the US for Russia, his birthplace.

If they had been successful, they could have lived a wealthy lifestyle without fear of being arrested by the US.

Customers of Bitfinex were forced to take a “haircut” when the theft occurred, losing 36% of their money held by the crypto exchange. The corporation had repaid the victims by 2019, thus the Hong Kong-based firm and certain customers who traded their losses for shares are now set to profit once the seized Bitcoins are returned.

Razzlekhan And Her Husband Were Found Guilty Of $4.5 Billion In Bitcoin Laundering

A husband and wife cyber-crime team pled guilty to attempting to launder $4.5 billion (£3.5 billion) in Bitcoin stolen in a 2016 breach.

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