Bitfinex hack launderer ‘Razzlekhan’ wants time served as sentencing looms

Heather Morgan, also known as the rapper “Razzlekhan,” has asked to avoid more prison time ahead of her sentencing for her role in laundering the Bitcoin her husband stole from the crypto exchange Bitfinex.

“Ms. Morgan has proven herself worthy of a second chance, and we respectfully ask this Court to give her that chance by imposing a sentence of time served,” Morgan’s lawyers asked a Washington, DC, federal court in an Oct. 31 filing.

They added she was subject to “difficult conditions” in her week-long pretrial incarceration — having to recover from surgery and getting COVID-19 — and, since her release in mid-February 2022, had “complied fully with the restrictive terms of pretrial release.”

Morgan faces a maximum combined sentence of ten years in prison after pleading guilty in an August 2023 plea deal to money laundering and fraud for helping launder 120,000 Bitcoin (BTC) currently worth about $8.2 billion stolen from Bitfinex by her husband Ilya Lichtenstein.

Last month, United States prosecutors asked for a lenient 18-month jail sentence for Morgan for providing “substantial assistance” to them. They also argued she was a “lower-level participant” compared to Lichtenstein and that she had only spent a “small fraction” of what the pair stole.

“She was in some ways thrust into the middle of a serious criminal scheme without her initial consent and undoubtedly felt compelled to support it out of a sense of loyalty to her husband and desire to preserve their life together,” prosecutors said.

Morgan’s lawyers argued she “did not plan or seek out the offense in this case” and learned of her husband’s hack over three years after he did it, but added she “acknowledges that she committed a serious offense” and is “deeply remorseful.”

Some have spotted Morgan at crypto-related conferences this year, and her lawyers said she’s been employed since her release. They claimed she “has also matured” — aiming to distance herself from her rapper “alter ego” Razzlekhan, described as “a caricature, wholly distinct” from her.

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In the August 2023 plea bargain, Morgan’s husband Lichtenstein admitted to stealing the 120,000 Bitcoin from Bitfinex and then enlisting his wife’s help to attempt to hide his tracks by funneling around 25,000 BTC through crypto mixers and other privacy services.

In a filing last month, US prosecutors told the court that Lichtenstein should get five years in jail — down from the 20 years he was facing — as his “substantial assistance” has “benefitted numerous investigations.”

Still, they said Lichtenstein should serve a longer sentence than Morgan as he spent months devising the scheme and experimented by stealing $200,000 from another exchange.

Morgan is scheduled to be sentenced on Nov. 15, while Lichtenstein’s sentencing is slated to take place a day earlier on Nov. 14.

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