A rapper who calls her 'Crocodile of Wall Street' and her entrepreneur husband have been arrested and charged with laundering billions in Bitcoin during the Bitfinex exchange hack in 2016. Ilya 'Dutch' Lichtenstein, 34, and his wife, Heather Rhiannon Morgan, 31, who raps under the name Razzlekhan, were arrested on federal charges of money laundering and defrauding the United States.
The couple accused of laundering as much as $4.5 billion in Bitcoin were arrested on Tuesday in Manhattan. At the time of the theft, 119,754 Bitcoin was worth around $71million. After years of cryptocurrency's value increasing, the amount is now around $4.5billion.
According to Federal law enforcement officials, who raided the couple's home during the arrest on Tuesday managed to recover roughly $3.6 billon in cryptocurrency linked to the hack of Bitfinex, a virtual currency exchange whose systems were breached nearly six years ago.
Lichtenstein, who describes himself as a "Technology entrepreneur, coder, and investor," on his LinkedIn profile, had allegedly transferred the stolen money to a digital wallet managed by him.
Lichtenstein and his wife Morgan then transferred the stolen money to their accounts via "a complicated money laundering process," prosecutors said.
According to the federal complaint unsealed on Tuesday, the couple allegedly spent the illegal proceeds on gold, NFTs, and a $500 Walmart gift card.
According to officials, this is the largest single seizure of funds in the Justice Department's history, and perhaps the most high-profile case since the department announced its initiative to take cryptocurrency crimes more aggressively.
"Today's arrests, and the department's largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals," said Deputy Attorney General Lisa O. Monaco, calling the laundering a "futile effort to maintain digital anonymity."
"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."
However, instead of being charged with hacking, Lichtenstein and Morgan have been charged with receiving and laundering stolen monies. The case was filed in a federal court in Washington, D.C.
Well Planned Move
Federal authorities have been investigating the case for years now but were unable to nab Lichtenstein and Morgan, who stayed in front of their eyes. According to police Lichtenstein and Morgan used several techniques to hide the money.
Prosecutors said the couple "used numerous sophisticated laundering techniques" as part of the scheme, including opening up internet accounts under false names and sending money through the darknet.
The couple also allegedly had a bag loaded with "burner phones" filled with cellphones in their Manhattan residence, where Lichtenstein officially lives.
Lichtenstein and Morgan live on Wall Street in lower Manhattan. He has a dual Russian-American citizenship and claims to be the co-founder of an online marketing company.
Morgan, a rapper and former Forbes contributor, defines herself as a "persuasion, social engineering, and game theory expert," and has dubbed herself the "Crocodile of Wall Street" in one of her songs.
"I'm many things, a rapper, an economist, a journalist, a writer, a CEO, and a dirty, dirty, dirty dirty h*," she raps in her 2019 single, 'Versace Bedouin'.
"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 Forbes bio reads.
Following his arrest, Lichtenstein was ordered to home detention on Tuesday with a wearable GPS and a $5million bond while Morgan has the same sentence but with a $3million bond, according to CoinDesk.
Morgan and Lichtenstein face charges of conspiracy to commit money laundering, which could mean up to 20 years in prison.