One quiet morning, two New York City residents were arrested.
The residents, Ilya Lichtenstein and his wife Heather Morgan, allegedly caught laundering stolen cryptocurrencies that are worth billions of dollars.
The cryptocurrencies could be linked to the 2016 hack of Bitfinex, according to a statement from the U.S. Department of Justice.
The couple used sophisticated techniques to hide their tracks, like creating fake online profiles and utilizing specialized software to automate transactions.
"Criminals always leave tracks, and today’s case is a reminder that the FBI has the tools to follow the digital trail, wherever it may lead," said FBI Deputy Director Paul M. Abbate.
In all, the authorities recovered what is considered among the largest financial seizure ever, with over $3.6 billion in Bitcoins out of the total $4.5 billion drained in the hack have been retrieved.
According to the court documents, Lichtenstein and Morgan allegedly conspired to launder 119,754 Bitcoins that were previously stolen from Bitfinex’s platform after a hacker breached the currency exchange's systems and made more than 2,000 unauthorized financial transactions.
Among the many transactions, a number of them were found sending the stolen cryptocurrencies to a digital wallet under Lichtenstein’s control.
After that, over the course of several years, around 25,000 of those stolen Bitcoins were transferred out of Lichtenstein’s digital wallet through series of money laundering schemes.
In the end, the stolen Bitcoins were cashed, and millions of dollars have been deposited into financial accounts controlled by the couple.
Other things the couple did to launder the stolen Bitcoins, also include the purchase of gold and NFTs (non-fungible tokens).
It's worth noting that when the news came out, the authorities have yet to publicly linked Ilya Lichtenstein and Heather Morgan to the actual hack of the cryptocurrency.
They are accused of laundering the $3.6 billion through a series of complicated financial transactions, and diverting unspecified millions of dollars to accounts they controlled.
According to a statement published by the FBI, the couple claimed that the Bitcoins held in their accounts belong to Demandpath and SalesFolk, a companies Morgan is CEO at.
After investigating, the authorities found that "the primary source of the BTC was the [victim cryptocurrency exchange] accounts that were opened in 2017 after the hack."
If proven guilty, Lichtenstein and Morgan can remain behind bars for at least 20 years. Conspiracy to defraud the U.S., carries a maximum sentence of five years in prison.
According to Deputy Attorney General Lisa O. 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 what form it takes."
Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division added that the arrests is proving that federal authorities are now able to follow money through the blockchain.
This fact should send signals to cybercriminals, that using blockchain to launder cryptocurrencies is no longer relevant.
Polite said, “that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system.”
On the internet and social media platforms, Lichtenstein went by the name "Dutch" and Morgan went by the name "Razzlekhan".
As for Razzlekhan, she has had a short-lived rap career in which she calls herself, "The infamous Crocodile of Wall Street."
In her 2019 rap video, Morgan dedicated her song "to all weirdos, entrepreneurs, hackers, misfits, and all the unique people who pursue what they want."
Morgan was also active on TikTok, where she did freestyle rapping, as well as giving business advices.
There, she also shared a number of beauty tips.
In one viral video, she told her viewers that the best way to get successful is to "automate, eliminate and delegate".
Morgan shared that she successfully built a multimillion dollar business at 22 "with zero outside funding," without mentioning how she did that in details.
The husband and wife were pretty much online most of the time, to also create blog for Forbes.
Morgan wrote articles about tips to protect business from cybercriminals, negotiation tactics, and how to become a successful YouTuber.
As for her husband, Lichtenstein was involved in the cryptocurrency world, according to his LinkedIn account, which listed him as a “early stage angel investing in founders and decentralized projects" of a company.
In 2023, the cybercriminal couple, the Bonnie and Clyde of the cryptocurrency finally pleaded guilty.
As part of a plea deal, Lichtenstein admitted to be the mastermind, and was behind the hack.
While the couple both pleaded guilty to money laundering, Morgan pleaded guilty to an additional count of conspiracy to defraud the United States.
The couple face prison sentences with Lichtenstein in line for a possible maximum 20 years in prison and Morgan a possible 10.
According to court documents, the prosecutors said that they uncovered communication records that indicate Morgan and Lichtenstein were planning to flee the U.S. for Russia, which is Lichtenstein's country of birth.
If successful, they would have probably lived a billionaire lifestyle, safe from arrest by the U.S..
It's worth noting though, if government prosecutors find that their cooperation has been sufficiently helpful, they can ask the judge for a sentence below those guidelines.
