Heather Morgan, a self-described "serial entrepreneur" who is also a rapper who goes by the stage name of "Razzlekhan," has been charged by the US Department of Justice in a money-laundering scheme that saw billions of stolen Bitcoins laundered through multiple fake accounts.
Morgan, alongside her husband Ilya “Dutch” Lichtenstein, was accused of benefiting from almost 120,000 in stolen Bitcoin. The cryptocurrency was stolen during a 2016 hack of Bitfinex which saw 2,000 unauthorized transactions transfer 119,754 bitcoin to a wallet controlled by Lichtenstein. Over the past five years, Morgan and Lichtenstein then laundered the money through multiple accounts set up with fake IDs.
“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions," said Deputy Attorney General Lisa O. Monaco. "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.”
One of the main draws and criticisms of cryptocurrency has been its supposed anonymity. Bitcoin and other cryptocurrency wallets don't need to be tethered to a real-world location or identity like a bank account, making them a popular choice for illicit business transactions.
According to the DOJ, Lichtenstein and Morgan transferred 25,000 Bitcoins over the past five years leaving 94,000 in Lichtenstein's wallet. The DOJ was able to seize those Bitcoins valued at approximately $3.6 billion, although that value changes frequently due to Bitcoin's wild exchange fluctuations.
Morgan's Twitter profile ironically notes her contributions to Forbes where she once wrote an article on how to protect yourself from cybercriminals.
Morgan and Lichtenstein have both been charged with conspiracy to commit money laundering and conspiracy to defraud the United States, which comes with a combined maximum sentence of 25 years. Their first court appearance is at 3 PM this afternoon in Manhattan.