Ilya Lichtenstein and Heather Morgan may have been in a Netflix collection: a rapper and a YouTuber, they grew to become the world’s richest thieves, sharing their insane life on social media whereas the FBI closed in on them.
Virtually all the pieces about this pair of digital buccaneers may be very otherworldly. Self-importance Truthful simply printed an entire chronicle of their adventures, making it clear that the rise of cryptocurrencies has created a brand new sort of white-collar legal.
The crime of the century
In August of 2016, Morgan and Lichtenstein got here into an enormous sum of money that didn’t belong to them. It’s not straightforward to find out particularly how a lot, as a result of the loot was in cryptocurrencies, whose worth in stable cash has fluctuated dramatically over the past half-decade. Nevertheless, provided that the loot was 119,754 bitcoins, at one level it could have been value about 70 million {dollars}.
These bitcoins had been stolen throughout a hack of Bitfinex, a web-based monetary platform. The coordinated assault lasted 4 hours, with the hackers seizing half of the accessible funds. It isn’t clear who perpetrated the crime, however a lot of the stolen cryptocurrencies went right into a digital pockets below the management of Lichtenstein.
For years, digital cash stood nonetheless, whereas its worth continued to rise or fall at a frantic tempo. Lastly, in 2021, it started to skyrocket. Lichtenstein initiated a collection of illicit transactions to launder the funds and switch them to accounts managed by him and his companion. In complete, 25,000 bitcoins had been put by a fancy computerized money-laundering course of, in order that they might be cleaned and spent past the sight of legislation enforcement.
However the path by no means actually went chilly. The FBI’s cybercrime unit went into motion as quickly because the stolen bitcoins had been detected. In the summertime of 2021, a bunch of federal brokers requested permission to entry the roof of 75 Wall Road in Manhattan, an imposing 42-story skyscraper. They recognized themselves to the doorman of the constructing and warranted him that they had been investigating a doable case of kid pornography, for which they wanted to watch all residences.
The doorman requested in the event that they had been certain that they’d the right handle: Quantity 95 on the identical avenue was a constructing frequented by gangsters and cocaine traffickers – the physique of an escort had been discovered there just some weeks earlier. 75 Wall Road, alternatively, was a good constructing, with residences and lofts priced at round $7 million every. However the brokers had no doubts. Utilizing the pretext of looking for youngster pornography, they saved coming again to the constructing many times till the top of 2021.
Livin’ la vida loca
What was the legal couple doing within the meantime? Lichtenstein, 34, an American of Russian origin pretending to be Dutch, was giving on-line recommendation about tech and finance. He additionally had a YouTube channel, the place he acted as an newbie magician and mentalist. Morgan, a 31-year-old Californian – often called “Razzlekhan” to her followers – always up to date her personal YouTube channel, the place she appeared rapping by the streets of New York, dressed as a pimp or Little Crimson Using Hood.
The 2 maintained very intense on-line exercise. They had been narcissistic and frivolous, always boasting about an more and more opulent life-style that appeared to don’t have any clear supply of revenue. Their hottest web page was an Instagram profile devoted to their Bengal cat. And, regardless of all the pieces, they went unnoticed, as a result of exhibitionism will not be anticipated in those that have one thing to cover.
Federal brokers had been baffled by the very specific sort of legal they had been coping with. As Nick Bilton – the creator of the Self-importance Truthful article on the couple – explains, “most huge cryptocurrency thefts go unpunished, as a result of they don’t seem to be dedicated by teenage hackers who spend hours of their mother and father’ storage, however by legal syndicates sponsored by regimes like North Korea or Iran.” The fruit of their misdeeds is spent on “shopping for unlawful weapons on the darkish internet or financing terrorist teams such because the Islamic State.”
Laptop crime items can typically monitor soiled cash by subtle synthetic intelligence methods… however the criminals are virtually all the time protected, in locations that may by no means conform to extradite them. The novelty on this case is that the suspects in one of many greatest cryptocurrency thefts in historical past had been two younger entrepreneurs – with no obvious legal connections – residing in the course of New York Metropolis, laundering cash by the handful with the identical computer systems used to rob Bitfinex.
Thomas Barrabi, a enterprise reporter at New York Put up, describes Lichtenstein and Dutch as “a few eccentric thirtysomethings with Peter Pan syndrome and legal genius.” Both they had been too intelligent, or they “turned out to be slightly dumb.”
The couple entertained the potential for disappearing from the map. They held pretend passports and it seems that they had been contemplating settling in Russia or Ukraine, laundering the cash from there and by no means returning to the US. Given the quantity of ill-gotten features they’d of their possession, it could have been a smart transfer. Nevertheless, someday in 2021, they modified their minds. They determined not solely to remain, but in addition to get married in a lavish marriage ceremony. They’d a raucous ceremony in Culver Metropolis, California, with tons of of company and groomsmen dressed up as bananas. After the marriage, a non-public bus took the complete group to an unique mansion within the city of Westlake Village, close to Los Angeles. It was, in keeping with attendees, a celebration as unusual because it was epic.
The FBI vs. Lichtenstein and Morgan
Again in New York, the newlyweds would quickly be in for an disagreeable shock. In January of 2022, the FBI already had a number of items of proof in opposition to them and broke into their condo with a search warrant. $40,000 in money and 50 digital units had been seized.
Within the weeks following the search, the rapper and guru continued residing their lives, extra current than ever on social media. If the federal investigation made them nervous, they didn’t present it. Despite the fact that they nonetheless had their passports, they didn’t try to flee. Both they didn’t absolutely understand the mess they had been in, or they’d already misplaced hope and opted to get pleasure from their final days of freedom. They had been arrested in February of this yr, accused of cash laundering. Within the absence of a smoking gun linking them past affordable doubt to the 2016 Bitfinex heist, they’ve been charged as accomplices.
Morgan is now out on bail. She’s been reunited together with her cat, however avoids social media and has stopped rapping. Lichtenstein has spent the previous few months behind bars. Each are negotiating with the federal government, hoping to cut back their sentences in trade for clarifying how one of the profitable Bitcoin thefts in historical past came about.
