Prosecutors Seek 18-Month Sentence for Heather Morgan in Bitfinex Bitcoin Laundering Case

Prosecutors are asking for Heather Morgan, known as “Razzlekhan,” to receive an 18-month prison sentence. This request stems from her involvement in laundering 120,000 bitcoins stolen from Bitfinex during a hack in 2016.

In August 2023, Morgan pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States. Each charge carries a maximum sentence of five years.

Initially, it seemed that Morgan and her husband, Ilya Lichtenstein, only laundered the proceeds from the hack, which is now valued at around $7.5 billion. However, Lichtenstein later admitted he was the original hacker. He also pleaded guilty to conspiracy to commit money laundering, which could lead to a maximum of 20 years in prison.

Court documents reveal that Lichtenstein acted alone during the hack in 2016. He didn’t involve Morgan until four years later, in 2020. This means she was an accessory to the crime after it happened.

Prosecutors stated, “She was thrust into a serious criminal scheme without her initial consent.” They added that she likely felt compelled to help her husband out of loyalty. However, they emphasized that this doesn’t lessen the seriousness of her actions, as she did ultimately join in and use her skills to assist in his criminal activities.

The prosecutors suggested a lighter sentence for Morgan, noting her early acceptance of responsibility and significant cooperation with law enforcement. They also mentioned she spent very little of the criminal proceeds.

However, they pointed out that Morgan attempted to obstruct justice during the investigation. She threw a computer down a garbage chute, deleted data from devices, and even pretended to grab her cat while secretly shutting off her phone during a search warrant execution at their Manhattan apartment.

Along with requesting jail time for Morgan, prosecutors want the court to order her to return the cryptocurrencies seized from the Bitfinex Hack Wallet. This includes approximately 94,643 BTC, 117,376 Bitcoin Cash (BCH), 117,376 Bitcoin Satoshi Vision (BSV), and 118,102 Bitcoin Gold (BTG). All of these are valued at over $6 billion at current prices.

Morgan is set to be sentenced on November 15 at 2:00 PM in Washington, D.C. This will be one day after Lichtenstein is sentenced.