Social media glitz masked ‘crimes of the bitcoin Bonnie and Clyde’

As the FBI searched her Wall Street apartment for evidence she was laundering stolen bitcoin, Heather Morgan pleaded to be allowed to find her cat. It was a ploy.

Ilya Lichtenstein and wife Heather Morgan.

As the FBI rifled through her Wall Street apartment, Heather Morgan pleaded to be allowed to find her cat. While under a bed, she made a grab for a phone and hit the lock button.

“Law enforcement had to wrest the phone from her hands,” prosecutors said.

Under the bed, agents found 50 electronic devices, dozens of SIM cards, $US40,000 in cash and a sponge bag labelled “burner phones”.

All of these items are now evidence against Ms Morgan and her husband, Ilya Lichtenstein, dubbed the “Bonnie and Clyde of the Crypto Age”, who ­appeared in a federal court last week charged with laundering ­billions of dollars in stolen bitcoin, in what authorities claim is the biggest financial seizure in US history.

Their story, prosecutors say, appears to be “from the pages of a spy novel”.

Mr Lichtenstein, 34, and Ms Morgan, 31, were styled as successful tech entrepreneurs.

He, a Russian-American nicknamed “Dutch”, had invested in Silicon Valley startups and dabbled as an “occasional magician”.

Ms Morgan, who had launched her first business in her early 20s and lived all over the world, was a self-styled “bad boss lady”. ­Beyond her business in “cold email” she was a goofy amateur rapper, going by the alter ego, Razzlekhan.

But they were hiding a huge ­secret, prosecutors said. Since 2017 they had been trying to launder 119,754 bitcoin hacked from the Hong Kong cryptocurrency exchange in 2016. Last week they were worth $US4.5bm ($6.3bn).

The couple have not been charged for the hack, and it is still unclear how they accessed the funds. Investigators believe Mr Lichtenstein and Ms Morgan ­siphoned cash via a web of bank accounts opened with false names.

Thousands of tiny transactions were used to move the money, ­investigators said. They were able to cash out at least $US2.9m. They bought gold and non-fungible ­tokens (NFTs), moving into the Wall Street building, where one-bed units start at $US1m.

In 2019 the couple visited Ukraine, where investigators ­believe they contacted criminals about fake passports. Officials say they were considering fleeing to Russia or Ukraine before the pandemic. But just before the arrest, agents decrypted a file on Mr Lichtenstein’s cloud storage account and found keys to 2000 virtual currency addresses. More than $US3.6bn of the stolen bitcoin was seized using the keys.

The couple’s lawyers said Ms Morgan was an unwitting bystander to the alleged crimes, for which they face up to 25 years in jail if convicted.

The Times