Photo booking for Heather Morgan and Ilya Lichtenstein.
Courtesy: Alexandria Adult Detention Center.
A federal prosecutor said in court Monday that he and his attorneys for a Woman accused of trying to launder $4.5 billion in stolen bitcoins with her husband is discussing the possibility of “solving” her criminal case without going to trial.
Disclosure hints that Heather “Razzlekhan” Morgan, who was only arrested with her husband Ilya “Dutch” Lichtenstein on February 8, could be offered a plea agreement in a case that has seen the Justice Department seize more than $3.6 billion in bitcoin as part of the alleged scheme.
This is the largest financial misappropriation in the department’s history.
Morgan, a 31-year-old rapper and businessman who was released from prison last Friday on $3 million bail, appeared by phone from her New York City home to testify in court. Washington federal court on Monday.
Her 34-year-old husband did not appear at the hearing. He was denied bail and remains in prison.
Early in the proceedings, Morgan told Judge Robin Meriweather that she had recently been diagnosed with Covid-19.
At the hearing, Morgan was again briefed on the nature of the charges against her. She and Lichtenstein are allegedly trying to conceal the origin of nearly 120,000 bitcoins stolen in the 2016 hack of the Bitfinex cryptocurrency.
Prosecutors allege the pair engaged in a series of elaborate transactions to launder the swiped bitcoins.
Neither defendants have been charged with the hack. At the time of the hack, the stolen bitcoins were worth $70 million, but the cryptocurrency has appreciated greatly in value in the years since.
At the hearing, Meriweather set Morgan’s next court date as March 25.
Assistant U.S. Attorney Christopher Brown, a cybercrime prosecutor, asked Meriweather to suspend the so-called speedometer for Morgan until then. That clock requires prosecutors to try defendants in federal felony criminal cases within 70 days of the date the indictment was issued.
Brown told the judge there were two main reasons for suspending the watch.
The first is the large amount of evidence shared with defense attorneys in the case, which Brown said is expected to be “complex and massive.”
The prosecutor said evidence will include thousands of financial transactions involving cryptocurrencies and US dollars over a five-year period, across dozens of financial accounts held in the defendants’ names.
Brown also noted that authorities seized more than 50 electronic devices from Morgan and Lichtenstein.
The second reason to suspend the clock, Brown said, was “to allow the parties to enter into discussions to resolve this case during the short trial period.”
Morgan’s attorneys did not object to the clock hanging, or Brown’s characterization of their discussions.
Prosecutors also wrote in the court filing: “The government and defense are engaged in discussions regarding the possibility of resolving this matter.”
Gerald Lefcourt, a New York attorney who previously served as president of the National Association of Criminal Lawyers, when read in that language by CNBC and informed of Brown’s comments, said: “They’re making a deal. negotiate.”
Lefcourt, who was not involved in the case, said: “It is typical language when the government and the defense inform the judge that they are discussing a possible plea agreement against the accused. .
Lefcourt also said that “it is not typical for prosecutors and defense attorneys to initiate plea bargaining negotiations shortly after the defendant’s arrest,” as was the case with Morgan.
“But, you know, there are a lot of situations where the government surprisingly learns a lot before filing ‘a criminal case,’ and the discerning defense attorney sees the writing on the wall.”
Samson Enzer, an attorney for Morgan, did not immediately respond to messages from CNBC seeking comment.
A spokesman for the United States Attorney’s Office for the District of Columbia declined to comment.
Netflix announced earlier this month that it has authorized a repository of documents about the case.
Netflix said the series about the pair will be directed by Chris Smith, who directed the Netflix series “FYRE: The Greatest Party That Never Happened,” about the rigged Fyre Festival, and is executive producer of the show. hit Covid pandemic “Tiger King.
