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‘Bitcoin Bonnie & Clyde’ to plead guilty for alleged $4.5B cryptocurrency laundering scheme

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‘Bitcoin Bonnie & Clyde’ to plead guilty for alleged .5B cryptocurrency laundering scheme

Crypto heist couple Ilya Lichtenstein and Heather Morgan — who were charged with laundering $4.5 billion in hacked Bitcoin in 2016 — are reportedly preparing to plead guilty ahead of their next scheduled court appearance on Aug. 3.

The so-called “Bitcoin Bonnie & Clyde” have been newly charged in the case with a document known as an information, which lays out criminal charges and is similar to an indictment, but which doesn’t require a grand jury’s vote, a Washington, D.C., federal court document filed Friday showed.

Federal prosecutors have been known to use the special documents when defendants agree to plead guilty.

Russian-born Lichtenstein, 34, and his wife Morgan, 32, previously pleaded not guilty in a February 2022 case that charged them of money laundering and conspiracy to defraud in the United States.

The pair were arrested at their Manhattan apartment earlier that month for allegedly attempting to launder an astounding $4.5 billion in cryptocurrency that had been stolen from Hong Kong’s Bitfinex, one of the world’s largest virtual cryptocurrency exchanges, in 2016.

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A new court filing hints that Ilya Lichtenstein (right) and Heather Morgan (left), who were charged with laundering $4.5 billion in hacked bitcoin back in 2016, appear to be gearing up to plead guilty.
Alexandria Adult Detention Center

Federal authorities accused the couple of trying to launder 119,754 bitcoin. At the time of the theft, the crypto amounted to about $70 million.

However, at the time of their arrest, the price inflated into the billions. Today, 119,754 bitcoin is worth nearly $3.6 billion.

Lichtenstein — a Russian emigre known as “Dutch” — was not granted bail, and has been in a Washington, D.C., jail since his arrest after being billed a flight risk.

Morgan — better known as the questionably talented rapper “Razzlekhan” who shares songs about being “the crocodile of Wall Street” — is free on a $3 million bond pending the outcome of negotiations.

The nature of the charges stated in the document are confidential, though the court docket showed that District of Columbia Judge Colleen Kollar-Kotelly ordered the couple’s defense to provide plea paperwork by Friday.

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Judge Kollar-Kotelly said the defendants’ paperwork must include “charged offense(s) and statutory provision; charge(s) in plea and statutory provision; elements of the offense; copy of the plea agreement; penalties; and [federal sentencing] guideline calculations,” according to the docket.


Russian-born Lichtenstein, 34, and his wife Morgan, 32, previously pleaded not guilty in a February 2022 case that charged them of money laundering and conspiracy to defraud in the United States.
Russian-born Lichtenstein, 34, and his wife Morgan, 32, previously pleaded not guilty in a February 2022 case that charged them of money laundering and conspiracy to defraud in the United States.
Instagram/heatherreyhan

The Post has reached out to Lichtenstein’s counsel at Cahill Gordon & Reindell, as well as Morgan’s legal team at Burnham & Gorokhov.

If found guilty, Lichtenstein and Morgan could face up to 25 years years behind bars. It’s unclear how a plea deal could affect their sentence.

Morgan has been spending her 24-hour house arrest holed up in the rented Wall Street high-rise she once shared with her husband.

The downtime had Morgan looking for remote work. In September, she tweeted saying: “Looking for remote B2B growth /marketing /sales /copywriting /demand gen work. Can be contract or potentially full-time. Have 10 years experience, including remotely managing distributed teams.”


Morgan -- a rapper who goes by Razzlekhan -- has been free on a $3 million bond while Russian emigre Lichtenstein has been jailed in Washington, D.C. since last February.
Morgan — a rapper who goes by Razzlekhan — has been free on a $3 million bond while Russian emigre Lichtenstein has been jailed in Washington, D.C. since last February.
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She also asked that only “serious opportunities with B2B (tech) companies” reach out.

The post came before a judge granted Morgan’s request to amend the terms of her home confinement.

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In January, US Magistrate Judge Zia M. Faruqui ruled that she could work from her employer’s New York office three days per week, from 10 a.m. to 8:30 p.m.

Faruqui also granted Morgan permission to use a computer and a smartphone — with monitoring software installed on both — in order to work from home, though she remained barred from carrying out any cryptocurrency transactions.

Morgan’s tweet appeared to have worked, as her lawyer, Eugene Gorokhov, said in a court filing that she was “in the role of growth marketing and business development specialist.” Her employer’s identity was kept confidential for safety reasons.

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Aside from the tweet on Morgan’s job hunt, she’s been quiet on all social media fronts, even halting her YouTube videos where she shared rap songs, ironically, about her being a hacking nerd.

On Instagram, the last post shared to Razzlekhan’s account was on Feb. 7, 2022, where Morgan recorded herself complaining that she feels like “a tortured dog going to the vet” when she goes to the nail salon.

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Dogecoin Jumps On Election Day: Poll Asks If Trump Or Harris Victory Will Spark 2025 Rally

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Dogecoin Jumps On Election Day: Poll Asks If Trump Or Harris Victory Will Spark 2025 Rally

Meme cryptocurrency Dogecoin DOGE/USD has experienced a surge in trading volume and price activity leading up to the 2024 presidential election.

A Benzinga poll asks readers to choose whether a victory by Donald Trump or Kamala Harris in the election could have a more positive impact on Dogecoin in 2025.

What Happened: Dogecoin is up 12% to $0.1761 on Tuesday, with the meme cryptocurrency seeing increased activity likely related to the 2024 election and positive mentions of the Department of Government Efficiency, or D.O.G.E. for short, by Elon Musk.

Musk is expected to join the Trump administration if the former president wins the 2024 election. In this role, Musk would seek to cut government inefficiencies and unnecessary departments, a role labeled under the D.O.G.E.

The Tesla CEO and billionaire mentioned D.O.G.E. during his most recent appearance Monday on “The Joe Rogan Experience” podcast, which is likely contributing to Dogecoin’s strong movement on Tuesday.

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“For Dogecoin’s future in 2025, who would be the better president: Kamala Harris or Donald Trump?” Benzinga recently asked.

The results were:

  • Donald Trump: 72%
  • Kamala Harris: 28%

The Benzinga poll found that respondents believe Trump would be more favorable for the future of Dogecoin, which may not come as a surprise given the former president’s reputation as a more pro-crypto leader.

Did You Know?

What’s Next: Trump, who previously spoke out against Bitcoin, reversed course and has appealed to cryptocurrency investors ahead of the 2024 election.

If Trump wins the 2024 election, cryptocurrency investors expect the price of Bitcoin BTC/USD and other cryptocurrencies to rise with a more crypto-friendly government in place and the likelihood that SEC Chair Gary Gensler will be replaced.

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While Harris has not been as vocal on cryptocurrency as Trump, there is belief that she could look to advance the sector forward if she wins the election.

Either way, Dogecoin could see high volatility during the week as the 2024 election outcome is expected to take some time to make official.

With a price of $0.1761 on Tuesday, Dogecoin is nearing its one-month high of $0.1792.

Over the last 52 weeks, Dogecoin has traded between $0.07028 and $0.2266. Dogecoin hit all-time highs of $0.7376 back in May 2021.

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The study was conducted by Benzinga from Nov. 4 through Nov. 5, 2024, and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from 134 adults.

Image created with Shutterstock and Midjourney.

Market News and Data brought to you by Benzinga APIs

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FBI finds $8.3 million embezzled by ‘pure evil’ Kansas banker in a cryptocurrency account in the Cayman Islands

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FBI finds .3 million embezzled by ‘pure evil’ Kansas banker in a cryptocurrency account in the Cayman Islands

Sobs of relief broke out in a federal courtroom in Kansas on Monday as dozens of people whose life savings had been embezzled by a bank CEO learned that federal law enforcement had recovered their money.

“I just can’t describe the weight lifted off of us,” said Bart Camilli, 70, who with his wife Cleo had just learned they’d recover close to $450,000 — money Bart began saving at 18 when he bought his first individual retirement account. “It’s life-changing.”

In August, former Kansas bank CEO Shan Hanes was sentenced to 24 years after stealing $47 million from customer accounts and wiring the money to cryptocurrency accounts run by scammers. Prosecutors said Hanes also stole $40,000 from his church, $10,000 from an investment club and $60,000 from his daughter’s college fund and lost $1.1 million of his own in the scheme. Deposits were “jettisoned into the ether,” said prosecutor Aaron Smith.

Hanes’ Heartland Tri-State Bank, drained of cash, was shut down by federal regulators and sold to another financial institution. Customers’ savings and checking accounts amounting to $47.1 million were insured by the Federal Deposit Insurance Corp., which paid off their losses.

But there were still 30 shareholders of the community-owned rural bank Hanes helped found — including his close family friends and neighbors — who thought they lost $8.3 million in investments: well-planned retirements were upended, funds for long-term eldercare gone, education funds and bequests for children and grandchildren zeroed out.

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On Monday the shareholders stood to cheer federal Judge John W. Broomes in Wichita after he told them, one at a time, that they’d be paid back in full. The FBI recovered the funds from a cryptocurrency account held by Tether Ltd. in the Cayman Islands.

During an earlier sentencing hearing, these victims had called Hanes a “deceitful cheat and a liar,” and “pure evil.”

Margaret Grice came to court Monday figuring she’d get $1,000 back. Instead, she learned she’d be recovering almost $250,000, her entire 401(k).

“I’m just really thrilled,” she said. “I can breathe.”

Prosecutors said Hanes, who was the CEO of Heartland Tri-State Bank in Elkhart, Kansas, lost the money in a scam referred to as “pig butchering,” or the way pigs are fattened before slaughter. In the scam, a third party gains a victims’ trust and, over time, convinces them to invest all of their money into cryptocurrency, which immediately disappears. U.S. and U.N. officials say these schemes are proliferating, with scammers largely in Southeast Asia increasingly taking advantage of Americans.

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Hanes started buying what he thought was $5,000 in cryptocurrency in late 2022, communicating with someone who had reached out on WhatsApp, according to court records. A few months later he transferred over his church and investment club funds. Records show the scam accelerated in the summer of 2023, when Hanes wired $47.1 million out of customer accounts in 11 wire transfers over just eight weeks. Each transfer, he thought, was necessary to end the investment and cash out, court records said. He watched, on a fake website, as the money appeared to grow to more than $200 million.

“He was to take some of the money, and the rest of the money was supposed to go back to the bank,” his attorney John Stang explained. “Now it’s fiction, it didn’t exist. We all know that now … It failed big time.”

Hanes, who was not in court Monday, apologized at an earlier sentencing hearing.

“From the deepest depth of my soul, I had no intention of ever causing the harm that I did,” he said. ”I’ll forever struggle to understand how I was duped and how what I thought was just getting the money back was making it worse.”

Prosecutors said Hanes wasn’t just the victim of a scam, he crossed a line when he began taking customers’ money and violating banking regulations. He pleaded guilty to embezzlement by a bank officer in May.

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His prominent standing in his hometown of 2,000 made it easier for him to get away with it, a Federal Reserve System investigation found; he had been on the school board, volunteered as a swim meet official, and served on the Kansas Bankers Association.

He also was a banking leader beyond his rural community. In recent years, he testified to Congressional committees about the importance of local banks in farming communities, and he served as a director for the American Bankers Association, which represents almost all banking assets in the U.S.

On Monday, prosecutors said the FDIC wanted to be paid back for the insurance claims it reimbursed to bank customers. But Judge Broomes said the economic circumstances of shareholders “who became insolvent because of a fraud scheme” justified paying them back first, before the FDIC recovers anything.

Hanes, 53, may be in his late 70s when he is released and is unlikely to be able to pay the FDIC the $47.1 million still owed.

In a court filing, Hanes and his attorney tried to explain what had happened.

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“Mr. Hanes made some very bad choices after being caught up in an extremely well-run cryptocurrency scam,” they said. “He was the pig that was butchered.”

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See the full agenda here, or request your invitation.

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$3M Bitcoin Forecast: Vaneck's Model Sees Central Bank BTC Adoption – Markets and Prices Bitcoin News

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M Bitcoin Forecast: Vaneck's Model Sees Central Bank BTC Adoption – Markets and Prices Bitcoin News
Bitcoin could reach $3 million, according to asset manager Vaneck, with a model showing its potential as a reserve asset held by global central banks. Bitcoin as Central Bank Asset? The $3M Target Driving Big Conversations Matthew Sigel, head of digital assets research at asset management firm Vaneck, analyzed bitcoin’s recent rise in an interview […]
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