Accused bitcoin launderer Heather Morgan in talks with prosecutors to avoid trial

A federal prosecutor mentioned in court docket Monday that he and legal professionals for a lady accused of making an attempt to launder $4.5 billion in stolen bitcoin together with her husband are discussing a potential “decision” of her prison case with out going to trial.

The disclosure strongly means that Heather “Razzlekhan” Morgan, who solely was arrested together with her husband Ilya “Dutch” Lichtenstein on Feb. 8, could possibly be supplied a plea deal in a case that has already seen the Justice Division seize greater than $3.6 billion in bitcoin that was a part of the alleged scheme.

It was the biggest monetary seize within the division’s historical past.

Morgan, a 31-year-old rapper and entrepreneur who was launched from jail final Friday on $3 million bond bail, appeared by way of telephone from her house in New York Metropolis for a listening to in Washington, D.C., federal court docket on Monday.

Her 34-year-old husband didn’t seem for the listening to. He has been denied bail and stays in jail.

Early within the continuing, Morgan informed Decide Robin Meriweather that she has lately been identified with Covid-19.

On the listening to, Morgan was suggested, once more, of the character of the fees towards her. She and Lichtenstein are accused of making an attempt to cover the supply of the practically 120,000 bitcoin stolen within the 2016 hack of the cryptocurrency Bitfinex.

Prosecutors accused the couple of partaking in a posh sequence of transactions to launder the swiped bitcoin.

Neither of the defendants is charged with the hack itself. On the time of the hack, the stolen bitcoin was price $70 million, however the cryptocurrency enormously appreciated in worth within the years since then.

On the listening to, Meriweather set Morgan’s subsequent court docket date for March 25.

Assistant U.S. Legal professional Christopher Brown, a cybercrimes prosecutor, requested Meriweather to droop the so-called speedy trial clock for Morgan till then. That clock requires prosecutors to attempt defendants in federal felony prison instances inside 70 days of an indictment being issued.

Brown informed the choose there have been two fundamental causes for suspending the clock.

The primary was the in depth quantity of proof to be shared with protection legal professionals within the case, which Brown mentioned is predicted to be “advanced and voluminous.”

The prosecutor mentioned the proof would come with hundreds of monetary transactions involving cryptocurrency and U.S. {dollars} over a five-year span, throughout dozens of monetary accounts within the defendants’ names.

Brown additionally famous that authorities had seized greater than 50 digital units from Morgan and Lichtenstein.

The second motive to droop the clock, Brown mentioned, was “to permit the events to interact in discussions for decision of this case wanting trial.”

Morgan’s legal professionals didn’t object to the suspension of the clock, or to Brown’s characterization of their discussions.

The prosecutors additionally wrote in court docket filings: “The Authorities and protection counsel are engaged in discussions regarding a potential disposition of this matter.”

Gerald Lefcourt, a New York legal professional who beforehand served as president of the Nationwide Affiliation of Legal Legal professionals, when learn that language by CNBC and knowledgeable of Brown’s feedback mentioned, “They’re plea bargaining.”

“That is typical language when the federal government and the protection informs the choose” that they’re discussing a potential plea cut price for a defendant, mentioned Lefcourt, who is just not related to the case.

Lefcourt additionally mentioned that “it is not typical” for prosecutors and protection legal professionals to start out plea talks so quickly after a defendant’s arrest, as seems to be the case for Morgan.

“However, you recognize, there are numerous conditions the place the federal government surprisingly learns a number of issues earlier than submitting” a prison case, “and vibrant protection legal professionals see the writing on the wall.”

Samson Enzer, Morgan’s lawyer, didn’t instantly reply to messages from CNBC looking for remark.

A spokesman for the U.S. Legal professional’s Workplace for the District of Columbia declined to remark.

Netflix introduced earlier this month that it had commissioned a docuseries concerning the case.

Netflix mentioned the sequence on the couple can be directed by Chris Smith, who helmed the Netflix sequence “FYRE: The Best Get together That By no means Occurred,” concerning the fraudulent Fyre Competition, and was government producer of the corporate’s Covid pandemic smash hit “Tiger King.