Heather Morgan, who was accused of helping launder proceeds from a 2016 Bitfinex hack, provided “substantial assistance” to prosecutors
A federal prosecutor has requested that Heather Morgan, better known by her rap moniker “Razzlekhan,” be sentenced to just 18 months behind bars for her role in laundering 120,000 bitcoins stolen from Bitfinex in a 2016 hack.
The request, filed in a sentencing memo on Monday, comes after Morgan pleaded guilty in August 2023 to one count of money laundering conspiracy and one count of conspiracy to defraud the United States, each of which carries a maximum sentence of five years in prison.
Prosecutors said in the memo that Morgan provided “substantial assistance to law enforcement,” which they said should be considered in her sentencing. They also noted that she accepted responsibility for her actions early on and that she herself spent very little of the criminal proceeds.
However, prosecutors also highlighted that Morgan attempted to obstruct justice at several points during the investigation. They said she destroyed evidence by throwing a computer down a garbage chute and deleting data from devices. Additionally, during law enforcement’s execution of a search warrant at her and Lichtenstein’s Manhattan apartment, they said she pretended to be grabbing her cat from under the bed while secretly shutting off her phone.
Prosecutors also asked the court to order Morgan to “return the cryptocurrencies seized by the government directly from the Bitfinex Hack Wallet – including approximately 94,643.29837084 BTC, 117,376.52651940 Bitcoin Cash (BCH), 117,376.58178024 Bitcoin Satoshi Vision (BSV), and 118,102.03258447 in Bitcoin Gold (BTG) valued at more than $6 billion at current prices – as in-kind restitution to Bitfinex.”
Morgan is set to be sentenced on Nov. 15 at 2:00 PM in Washington, D.C., one day after her husband, Ilya Lichtenstein, is sentenced.
In a separate filing on Monday, prosecutors said that Lichtenstein, who was first believed to only have helped launder the proceeds of the Bitfinex hack (worth approximately $7.5 billion at today’s value), later admitted to being the original hacker himself. He pleaded guilty to one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.
According to court documents, Lichtenstein carried out the hack alone in 2016, and did not tell his wife or enlist her help with laundering the money until four years later, in 2020, making her only an accessory to the crime after it had already occurred.
“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 in the memo. “That does negate the seriousness of her conduct, as she did ultimately join her husband’s conspiracy and use her own skillset to aid and enhance his criminal endeavors.”