Heather Morgan, who goes by the rapper name “Razzlekhan,” faces a request from U.S. prosecutors for an 18-month jail term due to her part in laundering 120,000 Bitcoin stolen from Bitfinex in 2016.
In an October 9 court filing, U.S. prosecutors asked for a more lenient sentence for Morgan, highlighting her “substantial assistance” in the plea deal involving her and her husband, Ilya Lichtenstein, that took place in July 2023.
Prosecutors argued that Morgan should receive a more lenient sentence since they consider her a “lower-level participant” in Lichtenstein’s actions and mentioned that she spent just a “small fraction” of the money stolen by the pair.
In August 2023, Morgan admitted guilt to money laundering and fraud charges related to her role in laundering Bitcoin, which is presently worth about $7.2 billion.
If sentenced to the fullest extent, she could face a total of 10 years in prison.
Initially, authorities assumed that their only involvement was in laundering the funds stolen in the 2016 Bitfinex hacking incident.
Lichtenstein later revealed that he was responsible for the hack and the money laundering.
Lichtenstein admitted guilt to a count of conspiracy related to money laundering and now faces up to 20 years in prison.
According to government prosecutors, Morgan was “initially unaware” of Lichtenstein’s acquisition of the 120,000 BTC, but by the beginning of 2020, he told her he had perpetrated the hack. She then helped him launder the money while conspiring to cover up his involvement.
“[Morgan] made a conscious decision to engage in specific criminal activity, helping her husband launder millions in stolen funds for their personal gain,” said the prosecutors in the filing.
“It was not a momentary lapse or impulsive decision: The defendant consciously participated in the money laundering conspiracy and conspiracy to defraud over the course of years,” prosecutors added.
Prosecutors noted that Morgan and Lichtenstein utilized a “variety of technologically sophisticated means” to launder the stolen Bitcoin, using non-compliant crypto exchanges, darknet markets, and crypto mixers to conceal their actions.
The government reported that Morgan purchased physical gold coins with some of the stolen money and buried them at a “secret location” that authorities have since identified.
Prosecutors have asked the court to impose an 18-month sentence on Morgan and also to order her to return the crypto assets that the government seized from the “Bitfinex Hack Wallet” as restitution to Bitfinex.
Approximately 95,000 BTC, 117,400 BCH, 117,400 BSV, and 118,100 BTG are stored in the wallet, which is valued at over $6 billion.
Scheduled for November 15, Morgan’s sentencing hearing will occur the day after Lichtenstein’s sentencing, which is on November 14.
