Crypto couple had Russian financial institution accounts and traveled to Ukraine to gather faux IDs, feds say — ‘Pulled from the pages of a spy novel’

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The hipster New York couple charged in one of many world’s largest crypto-currency thefts had been quietly establishing financial institution accounts in Russia and had traveled to Ukraine to be able to acquire false id paperwork, authorities stated.

Federal prosecutors laid out the brand new particulars of the couple’s monetary actions and travels as a part of the federal government’s enchantment of a decide’s ruling earlier this week to grant Ilya Lichtenstein and Heather Morgan bail.

The decide granted the 34-year-old Lichtenstein bail of $5 million and the 31-year-old Morgan bail for $3 million, however the pair stay in custody as the federal government appeals the ruling, arguing that the couple represented a critical flight danger. 

Prosecutors have stated they consider the couple nonetheless have management over crypto accounts containing $328 million and had expertise creating false identities and procuring false id papers by the darkish internet to be able to arrange financial institution accounts beneath faux names.

“The defendants haven’t only a robust incentive to flee, however the means to take action, they usually seem to have taken significant steps towards establishing new identities and monetary accounts in Ukraine and Russia to allow this flight.”


— Court docket submitting from the U.S. Lawyer for Washington, DC

Earlier this month, investigators have been capable of seize $3.6 billion value of bitcoin from crypto wallets managed by the couple. They stated the cash had been traced on to that stolen in a 2016 hack of the Bitfinex change. The Division of Justice stated It was the biggest single seizure of cash in its historical past.

Within the new court docket submitting, prosecutors detailed a 2019 journey Lichtenstein and Morgan had made to Ukraine throughout which they appeared to have acquired a number of packages containing false Ukrainian id paperwork, financial institution playing cards and SIM playing cards for his or her cellphones.

“The couple’s actions in Ukraine at instances seem pulled from the pages of a spy novel,” the court docket submitting learn. 

Prosecutors stated they believed the journey was a trial run for the couple’s eventual plan to depart america. In addition they stated that they had decided that Lichtenstein and Morgan had arrange quite a few accounts with Russian monetary establishments. 

Lichtenstein is a twin U.S.-Russian citizen and had renewed his Russian passport in 2019, prosecutors stated. Russia doesn’t extradite its personal residents and Morgan can be eligible for Russian citizenship on account of her marriage to Lichtenstein, prosecutors stated.

“The defendants haven’t only a robust incentive to flee, however the means to take action, they usually seem to have taken significant steps towards establishing new identities and monetary accounts in Ukraine and Russia to allow this flight,” prosecutors wrote. “The defendants’ entry to a whole lot of tens of millions of {dollars} in cryptocurrency, means to acquire false id paperwork on the darknet, and historical past of intensive deceitful conduct weigh closely in favor of detention.” 

An lawyer for the couple declined to touch upon the brand new court docket submitting, however had beforehand argued in court docket papers that the couple had been conscious they have been beneath investigation as early as November and had made no efforts to flee and famous that each the couple’s dad and mom have been required to place up their houses as safety as a part of the bail situations.

The submitting additionally stated that Lichtenstein had left Russia along with his household on the age of 6 to flee spiritual persecution and that the household had lived within the suburbs of Chicago ever since. 

The couple have for years been critical globetrotters, touring extensively in Europe, Asia and the Center East. Morgan had lived for prolonged durations in Egypt and Hong Kong. Individuals who knew the couple stated that they had turn into very cautious in the course of the pandemic and had severely imited their journey. 

Attorneys for the couple have stated Morgan had beforehand contracted the MERS virus throughout an outbreak within the Center East in 2012, and suffered from bronchial asthma, making her excessive danger for turning into severely unwell from COVID-19.

Quite a few digital units seized

The brand new authorities court docket submitting additionally detailed what had been seized from the couple’s Wall Road residence in the course of the execution of a search warrant on Jan. 5. Investigators stated they discovered luggage containing a number of cell telephones and SIM playing cards beneath the couple’s mattress, together with a bag marked “burner telephones.” In all, 50 digital units have been taken from the house, a few of that are nonetheless being examined, in keeping with the court docket submitting. 

Prosecutors additionally stated that Morgan at one level tried to lock out a cellphone to make it more durable for investigators to look at it and that the gadget needed to be wrestled away from her.

Investigators additionally seized some $40,000 in money, each in U.S. {dollars} and foreign exchange. In addition they uncovered proof that the couple had acquired some 70 gold cash, however have been unable to find them,

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