‘Razzlekhan’ Deserves Prison Term in Bitfinex Crypto Heist, US Says

The US asked that a Wall Street rapper who pleaded guilty to a money-laundering conspiracy in one of the biggest crypto heists ever spend 18 months in prison after she provided “substantial assistance” to the government.

Prosecutors recommended the sentence after Heather Morgan, who dubbed herself the “Crocodile of Wall Street,” helped investigators as part of a plea agreement last year, according to a filing late Wednesday in Washington federal court. The government claimed that Morgan helped her husband, Ilya Lichtenstein, hide stolen crypto after he hacked the Bitfinex exchange in 2016.

The government argued in its memorandum that Morgan — who also goes by the moniker Razzlekhan — held some responsibility for the hack because she later took steps to protect her husband by laundering the proceeds.

“While it is true the defendant did not participate in the original hack of Bitfinex, she was not a total stranger to the underlying offense,” prosecutors wrote.

Lichtenstein, who also pleaded guilty last year, has since helped prosecutors with other cases. Earlier this year, he appeared as a government witness in a money-laundering trial where he testified about how he used a mixing service called Bitcoin Fog to hide some of his proceeds.

The government said that the couple used the most complicated money-laundering techniques Internal Revenue Service agents had ever seen. Prosecutors claimed that Morgan and her husband tried to hide the trail of transactions using various techniques, including depositing and withdrawing funds from crypto exchanges and darknet markets. They also used the stolen money to buy nonfungible tokens, gold and Walmart gift cards, according to the government.

While Morgan didn’t find out about the hack until 2020, the government said she “made a conscious decision to engage in specific criminal activity, helping her husband launder millions in stolen funds for their personal gain.”

“The massive scale, extraordinary sophistication, and continuous and deliberate nature of the defendants’ criminal actions weigh in favor of a strong sentence,” prosecutors wrote.

At the same time, the government appeared to rest much of the blame for her actions on her husband.

“She was in some ways thrust into the middle of a serious criminal scheme without her initial consent, and undoubtedly felt compelled to support it out of a sense of loyalty to her husband and desire to preserve their life together,” prosecutors wrote.

Morgan, who also pleaded guilty to conspiring to defraud the US, faces a maximum of five years in prison for each of the two counts though due to federal sentencing guidelines and her cooperation, she will probably get far less time.

US v. Heather Rhiannon Morgan, 23-cr-00239, US District Court, District of Columbia (Washington).