The hipster duo accused of laundering billions of dollars in stolen cryptocurrency was at one point considering starting a new life in Eastern Europe and even had “a brief conversation in Russian” when they were arrested on February 8, Federal prosecutors said Thursday in a court filing arguing against releasing the couple on the bond.
Backing up their claims, the filing says FBI agents discovered a number of suspicious objects in the couple’s Wall Street apartment, including books with secret compartments made with hollow pages.
But defense attorneys describe themselves “Wall Street Crocodile“Heather Morgan, 31, and Ilya” Dutch “Lichtenstein, 34, stressed that the couple would not become fugitives, submit their own synopsis stating that they are both looking forward to becoming parents and wanted to maintain access to “some” embryos they “previously frozen at a New York hospital in anticipation of starting a family together.”
Morgan, one technology entrepreneur, first Forbes Contributorsand aspiring rapper under the nicknames “Razzlekhan” and Lichtenstein, who also have a background in technologycalculated with launder some $4.5 billion worth of Bitcoin stolen in a 2016 hack. Court documents outline a sophisticated scheme in which Morgan and Lichtenstein allegedly attempted to launder money through countless complex transactions between different fake accounts. However, a years-long investigation by agents with the IRS, FBI and Department of Homeland Security was able to trace the cash flow directly to the newlyweds, who were able to pull out about 2 $0.9 million in illegal Bitcoins before being caught. , prosecutors said.
Investigators have yet to access at least 24 accounts believed to be controlled by Morgan and Lichtenstein, containing about 7,500 Bitcoins, worth about $328 million, according to the government.
In a letter to Chief Judge Beryl Howell of the Washington, DC District Court, defense attorney Samson Enzer said Morgan, 31, “was only able to conceive using IVF because she was lost because she was lost. endometrial lining. The couple will never flee the country at the risk of losing their ability to have children, which they are discussing this year until their lives are disrupted by the arrests in this case.”
However, prosecutors argued that “no condition or combination of conditions can reliably guarantee the arrival of such sophisticated defendants with the means to escape and there are many incentives to do so.”
“The defendants are believed to have substantial additional assets, including hundreds of millions of dollars worth of virtual currency remaining stolen in the hack that have yet to be recovered,” the government filing states. . “Defendants also have access to multiple identities and fraudulent documents purchased on the darknet, and the ability to easily obtain more. Lichtenstein holds dual Russian citizenship. Defendants set up financial accounts in Russia and Ukraine, and appear to have established a contingency plan for a life in Ukraine and/or Russia prior to the COVID-19 pandemic.
Under the heading “Suspicious activity in Ukraine,” the filing describes a month-long trip by Morgan and Lichtenstein to Ukraine in August 2019.
“The couple’s activities in Ukraine sometimes emerge from the pages of a spy novel,” it said.
While they were in the country, Lichtenstein “created and/or modified multiple files in its cloud storage account containing money laundering notes and/or misidentifying documents with Ukrainian connections”, the petition said. allegations. The filing said one of the folders was labeled “personas” with subfolders containing Russian and Ukrainian identity documents under the names of others.
A document titled “suppliers” allegedly listed “descriptions of many darknet vendors and included notes regarding shipping options to Ukraine,” the filing continued. . “A supplier marked as” can be exchanged for cash in UA Kiev. ”” Another supplier with the note “Ask about shipping to Ukraine, how it works” and a third supplier named as the seller offered high-quality fake Ukrainian passports, according to the government.
In a file marked “courier,” investigators said they found what appeared to be tracking numbers for packages sent by darknet vendors listed in the “delivery carrier” document. grant”. A note attached to one person is said to have read, “Discounted bank debit card, 12 months guarantee. It is also possible to create a tag for our scan,” along with the symbol, “good opsec! ” Morgan and Lichtenstein had at least one shipment delivered to a boutique hotel in Kyiv, where they did not stay but located not far from the Hilton, where they stayed.
Unions say they have gathered heaps of additional evidence that Morgan and Lichtenstein intend to proceed, such as a document titled “ukraine_package,” written in Russian, explaining “how anonymously a parcel in Ukraine.” details of the location of security cameras in the Ukrainian post office, login details of multiple email accounts and a photo of Morgan holding a Kyivstar SIM card.
If the two fled to Russia, prosecutors said Lichtenstein “could escape prosecution in the United States indefinitely,” because Russia “did not extradite its citizens.” Additionally, “Morgan’s marriage to Lichtenstein would also qualify her for Russian citizenship… Files from Lichtenstein’s cloud storage account show Lichtenstein had access to multiple accounts at institutions Russian financial institutions and fake Russian identity documents for both men and women. ”
Morgan and Lichtenstein’s attorneys have tried — so far, unsuccessfully — to prove that the $3 million for Morgan and $5 million for Lichtenstein, both of which were partially secured by private homes. of their parents, would be motivating enough not to skip the town. Combined with home detention and GPS ankle monitors, their continued presence in court is all but guaranteed, the defense maintains.
By contrast, prosecutors said, although the $8 million in aggregate was “significant by any measure,” the government argued that the amount was “below the value of the funds set aside.” to the defendants if they choose to run away.”
“The offer of the defendants’ parents to secure the defendants’ bond with their own home was generous, but the (unspecified) value of that property is probably small compared with the hundreds of millions of dollars. dollars of crypto assets that the defendants have. access,” the records read, adding, “They can easily buy their parents new homes after fleeing to Ukraine or Russia, or establish a new life for themselves anywhere. with their newly acquired identity. ”
Prosecutors said neither Morgan nor Lichtenstein had specifically cooperated with authorities to date. A month before his arrest, the FBI executed a search warrant for Morgan and Lichtenstein’s apartment. But the couple said they didn’t want to stay at home while agents cleaned up their things.
“The agents allowed Morgan to take [couple’s] the cat was hiding under the bed,” government records said. “While Morgan crouched next to the bed calling the cat, she placed herself next to the nightstand, which still kept one of her phones. Then she reached up and took her cell phone from the nightstand and repeatedly pressed the lock button. It looks like Morgan is trying to lock the phone in a way that makes it harder for law enforcement to find the phone’s contents. Law enforcement had to wrest the phone from her.”
FBI agents seized, among other things, more than 50 electronic devices, in excess of $40,000 in cash, and a bag labeled “Phone Burner,” according to the filing. Prosecutors believe they may also have more cash in their possession: Both used some of the stolen Bitcoin to buy more than 70 one-ounce gold coins from different dealers, according to the filing. However, agents “did not find a single gold coin during a search of Lichtenstein and Morgan’s residence or their storage unit,” it said.
On Thursday afternoon, Howell ordered the transportation of Morgan and Lichtenstein from New York to DC, for a next bail hearing scheduled for Valentine’s Day. Their attorneys did not respond to The Daily Beast’s request for comment.