‘Pulled from the pages of a spy novel’: Crypto couple had Russian bank accounts and traveled to Ukraine to collect fake IDs, feds say

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The hip­ster New York cou­ple charged in one of the world’s biggest cryp­to-cur­ren­cy thefts had been qui­et­ly set­ting up bank accounts in Rus­sia and had trav­eled to Ukraine in order to obtain false iden­ti­ty doc­u­ments, author­i­ties said.

Fed­er­al pros­e­cu­tors laid out the new details of the couple’s finan­cial move­ments and trav­els as part of the government’s appeal of a judge’s rul­ing ear­li­er this week to grant Ilya Licht­en­stein and Heather Mor­gan bail.

The judge grant­ed the 34-year-old Licht­en­stein bail of $5 mil­lion and the 31-year-old Mor­gan bail for $3 mil­lion, but the pair remain in cus­tody as the gov­ern­ment appeals the rul­ing, argu­ing that the cou­ple rep­re­sent­ed a seri­ous flight risk. 

Pros­e­cu­tors have said they believe the cou­ple still have con­trol over cryp­to accounts con­tain­ing $328 mil­lion and had expe­ri­ence cre­at­ing false iden­ti­ties and procur­ing false iden­ti­ty papers through the dark web in order to set up bank accounts under fake names.

“The defen­dants have not just a strong incen­tive to flee, but the means to do so, and they appear to have tak­en mean­ing­ful steps toward estab­lish­ing new iden­ti­ties and finan­cial accounts in Ukraine and Rus­sia to enable this flight.”


— Court fil­ing from the U.S. Attor­ney for Wash­ing­ton, DC

Ear­li­er this month, inves­ti­ga­tors were able to seize $3.6 bil­lion worth of bit­coin from cryp­to wal­lets con­trolled by the cou­ple. They said the mon­ey had been traced direct­ly to that stolen in a 2016 hack of the Bitfinex exchange. The Depart­ment of Jus­tice said It was the largest sin­gle seizure of mon­ey in its history.

In the new court fil­ing, pros­e­cu­tors detailed a 2019 trip Licht­en­stein and Mor­gan had made to Ukraine dur­ing which they appeared to have received mul­ti­ple pack­ages con­tain­ing false Ukrain­ian iden­ti­ty doc­u­ments, bank cards and SIM cards for their mobile phones.

“The couple’s activ­i­ties in Ukraine at times appear pulled from the pages of a spy nov­el,” the court fil­ing read. 

Pros­e­cu­tors said they believed the trip was a tri­al run for the couple’s even­tu­al plan to leave the Unit­ed States. They also said they had deter­mined that Licht­en­stein and Mor­gan had set up numer­ous accounts with Russ­ian finan­cial institutions. 

Licht­en­stein is a dual U.S.-Russian cit­i­zen and had renewed his Russ­ian pass­port in 2019, pros­e­cu­tors said. Rus­sia doesn’t extra­dite its own cit­i­zens and Mor­gan would be eli­gi­ble for Russ­ian cit­i­zen­ship due to her mar­riage to Licht­en­stein, pros­e­cu­tors said.

“The defen­dants have not just a strong incen­tive to flee, but the means to do so, and they appear to have tak­en mean­ing­ful steps toward estab­lish­ing new iden­ti­ties and finan­cial accounts in Ukraine and Rus­sia to enable this flight,” pros­e­cu­tors wrote. “The defen­dants’ access to hun­dreds of mil­lions of dol­lars in cryp­tocur­ren­cy, abil­i­ty to pro­cure false iden­ti­ty doc­u­ments on the dark­net, and his­to­ry of exten­sive deceit­ful behav­ior weigh heav­i­ly in favor of detention.” 

An attor­ney for the cou­ple declined to com­ment on the new court fil­ing, but had pre­vi­ous­ly argued in court papers that the cou­ple had been aware they were under inves­ti­ga­tion as ear­ly as Novem­ber and had made no efforts to flee and not­ed that both the couple’s par­ents were required to put up their homes as secu­ri­ty as part of the bail conditions.

The fil­ing also said that Licht­en­stein had left Rus­sia with his fam­i­ly at the age of 6 to flee reli­gious per­se­cu­tion and that the fam­i­ly had lived in the sub­urbs of Chica­go ever since. 

The cou­ple have for years been seri­ous glo­be­trot­ters, trav­el­ing exten­sive­ly in Europe, Asia and the Mid­dle East. Mor­gan had lived for extend­ed peri­ods in Egypt and Hong Kong. Peo­ple who knew the cou­ple said they had become very cau­tious dur­ing the pan­dem­ic and had severe­ly imit­ed their travel. 

Attor­neys for the cou­ple have said Mor­gan had pre­vi­ous­ly con­tract­ed the MERS virus dur­ing an out­break in the Mid­dle East in 2012, and suf­fered from asth­ma, mak­ing her high risk for becom­ing seri­ous­ly ill from COVID-19.

Numerous electronic devices seized

The new gov­ern­ment court fil­ing also detailed what had been seized from the couple’s Wall Street apart­ment dur­ing the exe­cu­tion of a search war­rant on Jan. 5. Inves­ti­ga­tors said they found bags con­tain­ing mul­ti­ple cell phones and SIM cards under the couple’s bed, includ­ing a bag marked “burn­er phones.” In all, 50 elec­tron­ic devices were tak­en from the home, some of which are still being exam­ined, accord­ing to the court filing. 

Pros­e­cu­tors also said that Mor­gan at one point attempt­ed to lock out a phone to make it hard­er for inves­ti­ga­tors to exam­ine it and that the device had to be wres­tled away from her.

Inves­ti­ga­tors also seized some $40,000 in cash, both in U.S. dol­lars and for­eign cur­ren­cies. They also uncov­ered evi­dence that the cou­ple had acquired some 70 gold coins, but were unable to locate them,

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