How ‘Crocodile of Wall Street’ rapper stole £3.5BILLION worth of Bitcoin in ‘crypto heist of the century’
A RAPPER who calls herself the “Crocodile of Wall Street” and her tech entrepreneur husband have pleaded guilty to trying to launder £3.5bn of Bitcoin.
Heather Morgan, 32, and Ilya “Dutch” Lichtenstein, 34, were accused of laundering a cryptocurrency fortune of $4.5billion in Bitcoin after the Bitfinex exchange was hacked in 2016.
At the time of their arrest in February last year, the stash of 119,000 Bitcoins was worth about $4.5bn – making it the US Department of Justice’s largest single financial seizure in its history.
As part of a plea deal, Lichtenstein, a dual citizen of Russia and the US, admitted he was behind the hack.
The couple pleaded guilty to money laundering, but Morgan pleaded guilty to an additional count of conspiracy to defraud the United States.
They both now face prison sentences with Lichtenstein in line for a possible maximum 20 years in prison and Morgan a possible 10.
While evading police, Morgan pretended to be a rapper and tech entrepreneur.
Together with her husband, the New York couple loved sharing their high-roller lifestyle online.
Morgan – who goes by the stage name Razzlekhan – calls herself “the infamous Crocodile of Wall Street” who is “more fearless and more shameless than ever before” on her website.
In articles published in Forbes, she also claimed to be a successful tech businesswoman, calling herself an “economist, serial entrepreneur, software investor and rapper”.
But while developing Morgan’s rapping and tech persona, the couple cashed out their crypto fortune into traditional money using sophisticated techniques to try to stay under the radar.
According to court papers, the pair split up the bitcoin into tiny amounts and transferred it to thousands of different crypto wallets with fake identities, and mixed their stolen funds with other criminal cryptocurrency on the darknet marketplace Alphabay.
They also purchased gold coins and set up shell companies to make the Bitcoin funds look legitimate.
But one of their key mistakes shopping with Walmart supermarket vouchers paid for with the stolen funds.
“Police were able to link the Walmart gift cards back to some of the proceeds of the Bitfinex hack, which then opened up the further investigation,” said Jonathan Levin, founder of cryptocurrency investigators Chainalysis which was involved in the investigation.
“Buying gift cards and moving between different exchanges and different cryptocurrency never actually created this sort of break in provenance that the couple intended,” he said.
“Bitfinex will work with the DOJ and follow appropriate legal processes to establish our rights to a return of the stolen bitcoin,” Bitfinex said in a written statement.
When raiding the couple’s Manhattan home, cops found hollowed-out books created to hide mobile phones.
They also discovered dozens of burner handsets, several USB sticks and $40,000 in cash.
In court documents, prosecutors say they uncovered communication records that indicate Morgan and Lichtenstein were planning to flee the US for Russia – his country of birth.
If successful, they would have probably lived a billionaire lifestyle, safe from arrest by the US, the BBC reports.
Lichtenstein has worked as a tech entrepreneur and describes himself in online profiles as an “angel investor.”
He got engaged to Morgan in 2019, according to their Facebook posts.
“I got engaged to my best friend and the woman of my dreams!” Lichtenstein wrote.