Crypto, rap and a cat: what is known about the eccentric spouses arrested in the USA for laundering bitcoins for $ 4.5 billion

On February 8, 34-year-old businessman Ilya Lichtenstein and his wife, 31-year-old Heather Morgan, were detained in New York.

The couple were accused of creating an extensive network of fake accounts on various online financial platforms through which money was withdrawn, allegedly stolen as a result of a hacker attack on the major Hong Kong crypto exchange Bitfinex in 2016.

Then 119,754 bitcoins were stolen - at that time it was the equivalent of $71 million, and at the current value of bitcoin, this is over $4.5 billion (about 342 billion rubles).

The authorities insist that the bitcoins stolen from Bitfinex, through about 2 thousand transactions, were transferred to an electronic wallet, allegedly owned by Liechtenstein, from where he withdrawn money to other accounts.

The criminal schemes imputed to the spouses are described in a 20-page document, which was presented to the court by Christopher Yanchevsky, a special agent of the US Department of Justice's Internal Revenue Service investigating the case.

“Over the past five years, approximately 25 thousand (out of 119,754. - RT ) stolen bitcoins were transferred from Liechtenstein's wallet through a complex money laundering process, as a result, the money ended up in the accounts of Liechtenstein and Morgan.

The rest of the stolen funds, more than 94,000 bitcoins, remained in the wallet, which initially (after the Bitfinex hack

) received and stored the money stolen from Bitfinex, ”Yanchevski reported.

After Liechtenstein was detained, US Justice Department officials, having received a warrant, checked his e-wallets and were able to withdraw a total of $ 3.6 billion in bitcoins - this was the largest “catch” of the department in history.

Authorities believe this is money stolen from Bitfinex six years ago.

Thus, approximately 80% of all bitcoins stolen at that time remained untouched.

At the same time, the investigators have not yet presented to the court evidence of the spouses' participation in, in fact, the theft of bitcoins from Bitfinex itself - the Ministry of Justice report on the investigation states that in 2016 the money was stolen from a crypto exchange in Hong Kong by "unnamed persons".

However, Liechtenstein and Morgan were charged with money laundering through various illegal schemes, including creating accounts under fictitious names and using software to automate transactions.

The couple could face up to 20 years in prison.

Release on bail

On Monday, Heather Morgan was released from custody on $3 million bail. At the same time, Federal Judge Howell in Washington, where the case of the Russian and his wife was transferred at the request of the New York court, refused to release Ilya Lichtenstein from arrest.

According to The New York Times, the judge thought that the man might try to hide from the authorities, using his skills in quietly moving money and creating false identities.

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• © Heather Reyhan

According to the publication, at the February 16 hearing, the couple's lawyer Samson Enzer insisted that his clients were not interested in escaping from the United States, since their families live here.

In addition, the lawyer mentioned that the couple planned to have children in the near future - Heather Morgan is allegedly preparing to undergo an IVF procedure, the embryos for which, according to Enzer, are now in one of the New York clinics.

Ilya Lichtenstein, who was kept in custody despite the arguments of his lawyer and the proposed bail of $ 5 million, has dual citizenship - Russian and American.

However, the Consulate General of the Russian Federation in New York did not receive any appeals from him, Consul General Sergei Ovsyannikov told RIA Novosti.

Russian in the USA and his rapper wife

According to information from open sources, Liechtenstein spent almost his entire life in the United States, where he moved at the age of six from the Rostov region with his family.

Ilya spent his school years in Illinois, where his parents still live.

• © Photo from the personal archive

As RT managed to find out, Ilya's mother, Irina Shepotinovskaya, works at one of the state universities, and his father, Evgeny Lichtenstein, provides real estate services in Glenview.

The man declined to comment on RT's accusations made by the US authorities against his son.

On LinkedIn, Ilya Lichtenstein describes himself as a technology entrepreneur, programmer, and investor.

“I am interested in blockchain technology, automation and big data,” the man writes.

His online resume also says that he received a bachelor's degree in psychology from the University of Wisconsin.

• © Dutch Ilya Lichtenstein

In 2019, Liechtenstein proposed to his girlfriend Heather, and he asked for her hand in a very unusual manner - on his Facebook, Ilya said that he advertised to all of New York the work of his beloved, who writes rap under the pseudonym Razzlekhan.

For this surprise, Liechtenstein put up posters of Razzlekhan all over the city, and also bought a huge billboard on Wall Street.

After the couple were arrested for bitcoin fraud, Morgan's work attracted the attention of an even wider audience - the girl, for example, has a couple of compositions on the topic of investments, one of which contains the lines: "I stole your password, withdrew all your money."

Heather's interests are not limited to music.

On her Twitter profile, she describes herself as a "serial entrepreneur, Forbes contributor, surreal artist and rapper, investor and fashion designer."

Morgan's online resume also mentions that she holds a master's degree in economics from the American University in Cairo.

Because of the scandal with the investigation of the frauds imputed to the spouses Liechtenstein and Morgan, the network also began to actively discuss the surfaced articles by Heather, which she wrote for business publications, including Forbes and Inc.

The materials published under her name are quite diverse - in her texts, Morgan talked about marketing, ways to deal with stress, hiring employees - but her article in Forbes from 2020 attracted particular interest from Internet users: "How to protect your business from cybercriminals."

Finished screenplay

The story of Ilya Lichtenstein and Heather Morgan has become a real find for film producers - in addition to the impressive scale of the scam and rather colorful biographies of the heroes themselves, the American media are now full of interesting details of the detention of the spouses and their lifestyle on the eve of the arrest.

So, according to The Rolling Stone, on the day of the arrest, Heather Morgan, who opened the door to the police, “tried to use her domestic Bengal cat Clarissa as an excuse” to try to block the phone, pretending that she was getting the cat from under the bed.

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• © Dutch Ilya Lichtenstein

Those who follow the story of Liechtenstein and Morgan are now worried about the fate of the mentioned cat - after the arrest of the owners, nothing is heard about her whereabouts and well-being.

But it is known that keeping Bengal cats as a pet in New York is prohibited by local law.

The American media are also savoring the details of the funny spending of the “crypto-rich” spouses, reflected in the report on the investigation of the Ministry of Justice in relation to them.

So, the couple got caught using laundered funds to buy gift cards: Walmart, Uber, hotels.com and PlayStation.

The scenery of what is happening is also impressive: the apartment of Lichtenstein and Morgan, where the police came for them, is located on Wall Street, in one of the most expensive areas in Manhattan.

According to The New York Post, the rent of such housing cost the spouses at least $5,000 per month (more than 380,000 rubles). 

It is worth noting that this is not the first time Netflix has been inspired by stories involving Russian emigrants caught cheating.

On February 11, the platform hosted the premiere of the series Inventing Anna, which is based on the story of Anna Sorokina, a native of Domodedovo, who gained fame as a virtuoso fraudster in the United States.

The woman has been in New York social circles for years, successfully posing as a wealthy German heiress—she called her alter ego "Anna Delvey"—and tricking her friends into paying for her lavish lifestyle. 

Convicted of deception, Sorokina spent two years in prison, and after her release she was able to fully pay the fines imposed on her by the court and compensation for victims thanks to a fee of $ 300 thousand received from Netflix for the adaptation of her story.

Cybercrime investigation

The theft of money from the Bitfinex exchange, which was again talked about in connection with the arrest of Ilya Lichtenstein and his wife, made a lot of noise in August 2016.

This was one of the largest attacks on such a platform, although experts note that bitcoin is not the best choice for theft, since, unlike some other cryptocurrencies, it is relatively easy to trace using the blockchain.

Probably thanks to this, the American authorities were able to trace the missing money and reach Liechtenstein.

In an interview with RT, Igor Bederov, CEO of the Internet Investigation and Cybercrime Prevention Company, emphasized that in most US states, cryptocurrencies are recognized as a means of payment, and the state is able to control and track them.

“The United States has established mechanisms for monitoring and supervising transactions in simple cryptocurrencies such as bitcoin or ether (Ethereum

),” the expert explains.

- The state, for example, can, by collecting bank data on who bought the cryptocurrency, correlate it with the data of the open blockchain, which will reflect the very fact of the purchase, receipt of funds to the wallet, and draw a conclusion about who owns the crypto wallet.

There are many such methods, but they are not used in Russia, since cryptocurrencies are not recognized as a means of payment, we do not yet have tools and mechanisms for their regulation.”

Commenting on the recent arrest of Ilya Lichtenstein and his alleged connection with the money stolen from the Bitfinex exchange in 2016, Bederov mentioned that hacks and robberies of crypto exchanges are sometimes arranged by the owners of such sites themselves.

“It should be borne in mind that for any exchange, especially one that goes bankrupt, or is based in a state where work with cryptocurrencies is not established at the legislative level, there is a risk that administrators and owners of this exchange site can at any time pretend to be hacked, just throw codes access to hackers, by agreement with them, taking all the money of depositors.

Such risks always exist and such precedents have already been in Japan, and in the United States, and in Russia.

And in Hong Kong, this, of course, could also be, - says Bederov.

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There is a very big temptation here - imagine, there are some countless billions in cryptocurrency, and you are in a country that does not accept this means of payment and it is impossible to attract you for stealing it.

And so you break your own exchange, take money.

Then you withdraw what you have stolen in various ways, your depositors have lost everything, but they have nowhere to complain - Russian, for example, courts and law enforcement agencies will not accept such applications.