New Documents Detail Prosecutors’ Concerns That Bitfinex Hack Laundering Suspects Would Flee

Hours aft a New York magistrate justice ordered 2 individuals accused of laundering bitcoin from the 2016 Bitfinex hack released connected enslaved pursuing their apprehension connected Tuesday, a national justice struck down the order, staying their merchandise from custody.

New documents filed Thursday supply further grounds against Ilya “Dutch” Lichtenstein and Heather Morgan and picture prosecutors’ concerns that the mates are “sophisticated defendants with the means to fly and ample inducement to bash so.”

Lichtenstein and Morgan, a joined mates surviving successful New York, were arrested connected Tuesday for allegedly laundering astir 120,000 bitcoins – valued astatine $4.6 cardinal present – from the Bitfinex theft.

In precocious January, national agents decrypted a record stored connected 1 of Lichtenstein’s unreality accounts that contained the backstage cardinal to a wallet containing 94,636 BTC (worth astir $3.6 million), which was past seized by the Treasury Department. Outside of a bid of tiny transfers successful 2017 aimed astatine laundering a information of the funds, the authorities says the “majority” of the stolen funds successful Lichtenstein’s wallet were unmoved from August 2016 until the seizure successful January.

According to the report, Lichtenstein kept a spreadsheet connected his machine of fake personas and accounts the mates allegedly utilized to launder wealth done exchanges,

The defendants are believed to person astir $330 cardinal worthy of bitcoin that hasn't been discovered yet, arsenic good arsenic “significant further assets.”

Lichtenstein, a dual U.S.-Russian citizen, was recovered to person a papers connected his machine called “passport_ideas” that contained stolen biographical accusation purchased from a darknet marketplace, arsenic good arsenic links to darknet marketplace providers of mendacious individuality documents, prosecutors said. Prosecutors besides noted during the arraignment that Morgan was learning Russian, which the couple’s lawyers dismissed arsenic irrelevant.

However, the documents released Thursday accidental the mates “established fiscal accounts successful Russia and Ukraine and look to person been mounting up a contingency program for a beingness successful Ukraine and/or Russia anterior to the COVID-19 pandemic.”

According to the astir caller documents, the authorities has besides taken steps to combat the defense’s presumption astatine the Tuesday arraignment that Morgan was little progressive successful the strategy than her husband. Prosecutors allege that Morgan played an “integral relation successful the wealth laundering and fraud scheme.”

Prosecutors accidental Morgan often lied to banks and her ain accountant erstwhile questioned astir suspicious relationship activity, explaining distant large transfers arsenic a acquisition from Lichtenstein that she “had been keeping [in] acold storage,” oregon proceeds from her copywriting business, SalesFolk.

Morgan is accused of straight participating successful the laundering by transferring wealth to SalesFolk-controlled accounts from a Hong Kong-based ammunition institution that the authorities said the mates created to launder money.

Additional accusation astir the searches of the couple’s Financial District flat was besides provided successful Thursday’s documents.

Prosecutors accidental that astatine a Jan. 5 hunt of the couple’s phone, agents had to “wrest [Morgan’s] telephone from her hands” aft she attempted to fastener it portion pretending to get the couple’s cat, Clarissa, from nether their bed.

Under the bed, agents recovered a “bin containing assorted bags holding aggregate cellphones, SIM cards and assorted electronics,” including a integrative container labeled “burner phones.”

In Lichtenstein’s office, agents recovered “two hollowed-out books, whose pages appeared to beryllium astir chopped retired by hand.” The cavities were empty.

Law enforcement besides recovered implicit $40,000 successful currency and a “substantial magnitude of overseas currency” (the root was not noted successful the documents).

One happening missing from the couple’s flat were golden coins prosecutors accidental they antecedently purchased with bitcoin from a precious metals dealer. Though the authorities says the mates has astatine slightest “70 one-ounce golden coins,” not a azygous coin was recovered astatine the residence oregon a known retention unit.

Defense attorneys person filed a question urging the tribunal to reconsider its determination to support the mates detained pending trial.