- The couple laundered money in cryptocurrency stolen from 2016 hack of virtual currency exchange
- The couple is now facing federal charges of conspiracy to commit money laundering
- Investigators also found a folder labeled “passport ideas” from the couple’s home during search
In its largest-ever financial seizure, the US Justice Department has said it has arrested a New York couple, accused of laundering billions of dollars in cryptocurrency stolen from the 2016 hack of virtual currency exchange. According to the federal law enforcement officials, the recovered sum was linked to the hack of Bitfinex, a virtual currency exchange whose systems were breached by hackers nearly six years ago.
Accused of relying on various sophisticated techniques to launder stolen cryptocurrency and to conceal transactions, Ilya “Dutch” Lichtenstein (34) and his wife Heather Morgan (31) were arrested in Manhattan Tuesday morning (local time). They are now facing federal charges of conspiracy to commit money laundering and conspiracy to defraud the United States.
In its statement, the US Justice Department said the seizure amounted to more than $3.6 billion.
“The message to criminals is clear: Cryptocurrency is not a safe haven. We can and we will follow the money, no matter what form it takes,” Deputy Attorney General Lisa Monaco said in a video statement released by the Justice Department.
At an initial court appearance, a magistrate judge ruled Lichtenstein could be released into home detention on a $5 million bond co-signed by his parents; Whereas, the bond amount for Morgan was set at $3 million. They are to remain in custody until the bail conditions are met.
Meanwhile, prosecutors argued the defendants should be denied bail, calling them flight risks who still potentially have access to vast sums of money.
In addition, during a search of their home, investigators found a folder labeled “passport ideas” that contained information on how to get fake IDs, along with a stash of burner phones, the prosecutors said.
Commenting on the seizure, authorities said they ultimately traced the stolen funds to more than a dozen accounts that were controlled by Lichtenstein, Morgan and their businesses.
Court documents accused the couple of relying on classic money-laundering techniques to hide their activities and the movement of the money, such as setting up accounts with fictitious names and using computer programs to automate transactions.
They also relied on AlphaBay, a dark web criminal marketplace that was dismantled by the Justice Department in 2017, as an opportunity to conceal their transactions and make them harder to trace, prosecutors said.
Millions of dollars of the transactions were cashed out through bitcoin ATMs and used to purchase gold and non-fungible tokens as well as more mundane items like Walmart gift cards for personal expenses, they added.
(With inputs from AP)