Accused bitcoin money launderer Heather Morgan in plea talks

Heather Morgan booking photo

Courtesy of: Alexandria Adult Detention Center.

Federal prosecutors said Monday they were negotiating with a New York woman who was recently arrested with her husband on charges of laundering $4.5 billion in stolen bitcoin cryptocurrency.

The talks were cited in a request from prosecutors who asked a judge to postpone Friday’s scheduled hearing for the woman, Heather “Razzlekhan” Morgan, in the U.S. district court in Washington DC by 40 days.

Prosecutors said in a lawsuit that the postponement would “…facilitate plea talks between the parties,” and give them time to gather and share evidence that could be used against Morgan with her lawyers.

Morgan, 31, was arrested on February 8 along with her husband, 34-year-old Ilya “Dutch” Lichtenstein, in their Manhattan apartment. The arrests came on the same day that the Justice Department has said it seized more than $3.6 billion worth of bitcoin that was part of the alleged money laundering program.

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Prosecutors allege that the pair illegally tried to hide, through a complex series of transactions, the source of nearly 120,000 bitcoins stolen during the 2016 hack of the Bitfinex cryptocurrency exchange. None of the defendants are charged with the hack itself.

At the time of the hack, the stolen bitcoin was worth $70 million. But since then, the value of bitcoin has soared.

Morgan’s attorneys are not opposing the postponement of her hearing, according to Monday’s filing by the U.S. Attorney’s Office for the District of Columbia.

Prosecutors announced in court on Feb. 28 that they were discussing a possible “solution” to Morgan’s criminal case to avoid trial.

But until Monday, they hadn’t publicly used the words “plea talks” to describe those conversations with her lawyers.

Morgan’s lead attorney did not immediately respond to a request for comment on the filing.

It is common for prosecutors and defense attorneys to discuss possible plea deals in criminal cases, and those conversations lead to the postponement of court hearings.

Morgan’s case is unusual, however, because of the relatively short time between her arrest and the disclosure of plea talks.

Morgan, an aspiring rapper and entrepreneur, is free on a $3 million bond.

Lichtenstein has been in prison since his arrest and has been released on bail.

Netflix announced last month that a series about the pair will be directed by Chris Smith, who executive produced the company’s Covid pandemic hit “Tiger King.”

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