Who are 'Bitcoin Bonnie and Clyde', couple guilty of $4.5 billion money-laundering scheme?

A couple known as the ‘Bitcoin Bonnie and Clyde’ have pleaded guilty to a multi-billion-dollar money-laundering scheme on Thursday. Ilya Lichtenstein and Heather Morgan, a married couple from New York,  were arrested last February. The justice department in February seized 95,000 bitcoin from the duo – then valued at $3.6 billion. The government at the time called their arrest its “largest financial seizure ever.” Let’s take a closer look at them: Who are they? According to CNN, the 35-year-old Lichtenstein is originally from Russia. As per Washington Post, Lichtenstein, a dual citizen, was raised in a suburb in the Midwest.

A high-school friend called him “introverted but really tech-savvy.”

Lichtenstein has a degree in psychology and describes himself as a technology entrepreneur on his LinkedIn profile. As per Forbes, Lichtenstein previously raised funds from billionaire Marc Cuban and even launched a company. He has invested in startups alongside tech leaders like Marc Benioff. His wife Morgan, 33, is a marketing expert as per Washington Post. She has written for Forbes.com on women in leadership positions. Morgan is also an aspiring rapper who has called herself ‘the crocodile of Wall Street’, as per CNN. Her Twitter bio reads: “I make the weird kids feel at home.” She calls herself a “tech entrepreneur, surrealist artist, rapper, prolific writer, & fashion designer with synesthesia.” The couple have been seen walking their Bengal Cat Clarissa on a leash in Manhattan, as per CNN. One of Morgan’s many aliases was “Razzlekhan” while Lichtenstein was known as “Dutch.” The couple were dubbed “Bitcoin Bonnie and Crypto Clyde” by financial newsletter Morning Brew. What do we know about the case? The couple in court on Thursday pleaded guilty to laundering money stolen in a 2016 hack of cryptocurrency exchange Bitfinex through an elaborate scheme involving burning documents in a trash can in Kazakhstan. Prosecutors said the pair stole the bitcoin in 2016 using “advanced hacking tools.” The tokens were worth $71 million at the time of the hack but had appreciated to more than $4.5 billion at the time of their 22 February arrests in New York. [caption id=“attachment_12507432” align=“alignnone” width=“640”] The tokens were worth $71 million at the time of the hack but had appreciated to more than $4.5 billion at the time of their 22 February arrests in New York.[/caption] According to Forbes, there was high drama at the couple’s New York home in January after federal agents turned up.

After investigators agreed to let Morgan retrieve her cat from the bedroom, she frantically attempted to lock her phone.

“While Morgan was crouched next to the bed calling to the cat, she positioned herself next to the nightstand, which was still holding one of her phones. She then reached up and grabbed her cell phone from the nightstand and repeatedly hit the lock button. It appeared that Morgan was attempting to lock the phone in a way that would make it more difficult for law enforcement to search the phone’s contents. Law enforcement had to wrest the phone from her hands,” the document states. Investigators found $40,000 in cash, dozens of electronic devices, and even two hollowed-out books, among other items. Since their arrests, the government has seized another approximately $475 million tied to the hack, the Southern District of New York said in a statement. The couple also agreed to jointly forfeit another $72 million. In total, the couple admitted to laundering conspiracies arising from the theft of approximately 120,000 bitcoin from Bitfinex, a global cryptocurrency exchange. The charges carry a maximum penalty of 20 years in prison. Prosecutor Christopher Brown said Lichtenstein also had a long history of hacking, including as a juvenile, and had stolen funds from virtual currency exchanges prior to 2016. Lichtenstein admitted to hacking the exchange and enlisting his wife Morgan to help conceal some 119,754 stolen bitcoin. “It was at my direction,” Lichtenstein told the judge. But Forbes quoted prosecutors as saying that Morgan was extremely ‘hands-on’ when it came to the scheme and that her business accounts were employed to “clean and legitimize funds stolen.” Prosecutors said that Lichtenstein, at times with Morgan’s help, “employed numerous sophisticated laundering techniques.” That included using fictitious identities to set up online accounts and utilizing computer programs to automate transactions. They deposited the stolen funds into accounts in a variety of darknet markets and cryptocurrency exchanges and then withdrew the money, which confuses the transaction history. They couple also converted bitcoin to other forms of cryptocurrency and even exchanged a portion of the stolen funds into gold coins, which Morgan then concealed by burying them. ‘He was evasive’ Morgan at a separate plea hearing said her husband first told her he had hacked the exchange in 2020, but that she had long been suspicious his money came from an illicit source such as drugs or tax evasion. She said the couple took several trips to Ukraine and Kazakhstan, which she thought were for tourism and generating business for a company they ran. But she said alarm bells went off when she saw Lichtenstein burning documents in a trash can during a Kazakhstan visit. “When I asked him about it, he was evasive,” Morgan said.

Sentencing dates have not been not set.

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Both defendants agreed to cooperate with the US Attorney’s office in Washington as part of a late July plea deal. Before Lichtenstein’s plea hearing ended, his lawyer Samson Enzer asked Kollar-Kotelly if his client, who is jailed, could speak to Morgan, who is free on bail and was in the courtroom audience. A member of the US Marshals Service told them no contact was allowed. Lichtenstein, wearing a dark green T-shirt reading “prisoner” on the back, then looked toward Morgan and puckered his lips as if to blow a kiss. Morgan waved back as he was led out of the courtroom. With inputs from agencies