1 00:00:08,208 --> 00:00:10,777 Narrator: In this episode of "American Greed"... 2 00:00:10,810 --> 00:00:13,680 Billions of dollars in stolen cryptocurrency. 3 00:00:13,713 --> 00:00:18,051 Narrator: someone's laundering a crypto fortune. 4 00:00:18,084 --> 00:00:20,320 Is it a genius hacker, 5 00:00:20,353 --> 00:00:22,856 a state-sponsored terrorist? 6 00:00:22,889 --> 00:00:27,994 After six mysterious years, the alleged launderer is unmasked... 7 00:00:28,028 --> 00:00:30,730 This is the craziest story of the day, So here we go. 8 00:00:30,764 --> 00:00:33,400 ♪ Razzlekhan, the Versace bedouin ♪ 9 00:00:33,433 --> 00:00:35,235 ♪ Crocodile of Wall Street ♪ 10 00:00:35,268 --> 00:00:38,171 Narrator: Heather Morgan... A businesswoman, 11 00:00:38,204 --> 00:00:40,874 social-media influencer, and journalist 12 00:00:40,907 --> 00:00:45,545 with a bizarre alter ego called Razzlekhan. 13 00:00:48,615 --> 00:00:50,417 She saw herself as a real entrepreneur, 14 00:00:50,450 --> 00:00:52,018 making things happen. 15 00:00:52,052 --> 00:00:53,353 Narrator: Her husband... 16 00:00:53,386 --> 00:00:57,357 Ilya Lichtenstein, a budding tech mogul. 17 00:00:57,390 --> 00:01:00,093 He's, like, an opportunist and a greedy one. 18 00:01:00,126 --> 00:01:01,695 Narrator: They've got it all, 19 00:01:01,728 --> 00:01:04,898 and they love nothing more than to flaunt it online. 20 00:01:04,931 --> 00:01:06,833 Aah! 21 00:01:06,866 --> 00:01:09,102 We call them the Bonnie and Clyde of crypto. 22 00:01:09,135 --> 00:01:12,605 ♪ Our mission is noble, yeah, I wanna be a mogul ♪ 23 00:01:12,639 --> 00:01:16,609 Watkins: They were either really brilliant or really stupid 24 00:01:16,643 --> 00:01:18,545 or just crazy. 25 00:01:18,578 --> 00:01:21,948 Narrator: The government says this crypto odd couple laundered 26 00:01:21,981 --> 00:01:25,952 $4.5 billion in stolen bitcoin, 27 00:01:25,985 --> 00:01:27,487 smashing records... 28 00:01:27,520 --> 00:01:31,067 This is the largest seizure of cryptocurrency ever 29 00:01:31,091 --> 00:01:32,559 by U.S. law enforcement. 30 00:01:32,592 --> 00:01:34,160 Narrator: "American Greed" takes you 31 00:01:34,194 --> 00:01:35,729 inside the investigation 32 00:01:35,762 --> 00:01:40,100 and online with the self-styled crocodile of Wall Street, 33 00:01:40,133 --> 00:01:42,469 while the case is still unfolding. 34 00:01:42,502 --> 00:01:45,705 Hey, we have an announcement. 35 00:01:45,739 --> 00:01:48,108 Could she and her husband have razzle-dazzled 36 00:01:48,141 --> 00:01:52,445 one of the boldest and strangest digital crimes of all time? 37 00:01:52,479 --> 00:01:56,282 Shin: The notion that they could be laundering 38 00:01:56,316 --> 00:02:00,353 $4.5 billion worth of bitcoin blew people's minds. 39 00:02:00,387 --> 00:02:01,821 Razzle dazzle! Agh! 40 00:02:01,855 --> 00:02:09,855 ♪♪ 41 00:02:15,201 --> 00:02:16,970 Narrator: Cryptocurrency... 42 00:02:17,070 --> 00:02:20,974 A fledgling market of digital coins just a decade ago 43 00:02:21,074 --> 00:02:25,445 that has exploded into a trillion-dollar industry. 44 00:02:25,478 --> 00:02:28,548 Some people ask like, "Is this a new frontier in finance 45 00:02:28,581 --> 00:02:31,951 or is it some kind of goofy Beanie Babies type phenomenon?" 46 00:02:31,985 --> 00:02:33,520 And the truth is that it's both. 47 00:02:33,553 --> 00:02:37,457 The overall crypto market broke $2 trillion this month. 48 00:02:37,490 --> 00:02:40,226 Narrator: The market grows so quickly 49 00:02:40,260 --> 00:02:43,129 that law enforcement can barely keep up. 50 00:02:43,163 --> 00:02:45,131 Brown: Cryptocurrency is kind of the Wild West 51 00:02:45,165 --> 00:02:46,499 in terms of regulation. 52 00:02:46,533 --> 00:02:49,669 There's a lot of room for criminal actors. 53 00:02:49,703 --> 00:02:52,672 Narrator: In this new frontier of digital scammers, 54 00:02:52,706 --> 00:02:54,874 one of crypto's most notorious heists 55 00:02:54,908 --> 00:03:00,113 occurs on August 2, 2016, when someone hacks 56 00:03:00,146 --> 00:03:05,185 a virtual currency exchange called Bitfinex. 57 00:03:05,218 --> 00:03:10,590 Shin: It was hacked for 119,754 bitcoin. 58 00:03:10,623 --> 00:03:14,427 And this was actually a really startling event. 59 00:03:14,461 --> 00:03:16,329 Man: Trading on the digital currency exchange 60 00:03:16,363 --> 00:03:18,865 was suspended after that breach was discovered. 61 00:03:18,898 --> 00:03:20,433 Narrator: The stolen currency 62 00:03:20,467 --> 00:03:23,670 is worth $71 million at the time. 63 00:03:23,703 --> 00:03:26,806 Stealing all those funds is a curse in many ways 64 00:03:26,840 --> 00:03:29,843 because this was obviously a huge amount 65 00:03:29,876 --> 00:03:33,146 and one that was certainly going to attract the attention 66 00:03:33,179 --> 00:03:36,349 of United States law enforcement. 67 00:03:36,383 --> 00:03:40,787 Narrator: So who has the skills, guts or foolishness 68 00:03:40,820 --> 00:03:42,989 to commit such a brazen crime? 69 00:03:43,089 --> 00:03:48,695 ♪♪ 70 00:03:48,728 --> 00:03:52,599 The crypto industry booms despite the Bitfinex hack, 71 00:03:52,632 --> 00:03:56,503 especially in the Bay Area, where Heather Morgan, 72 00:03:56,536 --> 00:03:59,606 who presents herself like many other young strivers, 73 00:03:59,639 --> 00:04:03,209 dreams of launching the next big thing. 74 00:04:03,243 --> 00:04:04,611 Morgan's come a long way 75 00:04:04,644 --> 00:04:06,880 from her humble Northern California roots 76 00:04:06,913 --> 00:04:12,085 in Tehama, California, a town of 400 people. 77 00:04:12,118 --> 00:04:15,555 Growing up, I did not have a lot of friends. 78 00:04:15,588 --> 00:04:17,891 Narrator: She reflects on her childhood in a video 79 00:04:17,924 --> 00:04:20,193 posted on her YouTube channel, 80 00:04:20,226 --> 00:04:23,830 one of nearly a dozen social-media accounts 81 00:04:23,863 --> 00:04:26,966 in which Morgan shares intimate details of her life. 82 00:04:27,067 --> 00:04:28,702 When you have 20 kids in the class 83 00:04:28,735 --> 00:04:32,739 and they've all known each other from first through eighth grade, 84 00:04:32,772 --> 00:04:35,175 and you're kind of weird and different, 85 00:04:35,208 --> 00:04:37,777 you're gonna get bullied mercilessly. 86 00:04:37,811 --> 00:04:41,281 She said that she didn't really ever fit in. 87 00:04:41,314 --> 00:04:42,582 She had a speech impediment 88 00:04:42,615 --> 00:04:44,417 and sometimes she would get bullied 89 00:04:44,451 --> 00:04:48,688 and people just didn't have this ambition that she had. 90 00:04:48,722 --> 00:04:53,593 And I remember thinking, "The ocean, yeah, it's big, 91 00:04:53,626 --> 00:04:56,463 but I'm a shark, I belong in the ocean, 92 00:04:56,496 --> 00:05:00,500 not in a mud puddle or a pond!" 93 00:05:00,533 --> 00:05:02,469 Narrator: Morgan leaves behind the mud puddle 94 00:05:02,502 --> 00:05:06,339 and has no intentions of ever returning. 95 00:05:06,373 --> 00:05:07,607 She earns scholarships 96 00:05:07,640 --> 00:05:09,876 to the University of California, Davis, 97 00:05:09,909 --> 00:05:14,080 graduating in just three years with a degree in economics 98 00:05:14,114 --> 00:05:16,649 and international relations. 99 00:05:16,683 --> 00:05:20,653 She documents her travels to Asia and the Middle East 100 00:05:20,687 --> 00:05:23,289 and begins collaborating after graduation 101 00:05:23,323 --> 00:05:24,691 with an economics professor 102 00:05:24,724 --> 00:05:28,895 named Travis Lybbert on an academic paper. 103 00:05:28,928 --> 00:05:32,265 She had a very quick mind. She was very professional. 104 00:05:32,298 --> 00:05:35,168 You know, very put-together, very aware of her image, 105 00:05:35,201 --> 00:05:36,703 all in the way that you would expect 106 00:05:36,736 --> 00:05:38,371 of an aspiring young professional. 107 00:05:38,405 --> 00:05:40,306 Narrator: Though they communicate 108 00:05:40,340 --> 00:05:41,574 through Skype and e-mail, 109 00:05:41,608 --> 00:05:44,944 Morgan's ambition cuts through cyberspace. 110 00:05:44,978 --> 00:05:47,180 Lybbert: There was kind of a restlessness to her. 111 00:05:47,213 --> 00:05:49,249 Always kind of angling for the next thing. 112 00:05:49,282 --> 00:05:51,418 She saw herself as a real entrepreneur, 113 00:05:51,451 --> 00:05:54,454 as someone who was, like, making things happen. 114 00:05:54,487 --> 00:05:57,323 Narrator: After their 8-month collaboration ends, 115 00:05:57,357 --> 00:05:58,958 Lybbert agrees to write Morgan 116 00:05:58,992 --> 00:06:03,196 a letter of recommendation to PhD programs in economics. 117 00:06:03,229 --> 00:06:06,299 But she never takes him up on it. 118 00:06:06,332 --> 00:06:08,668 Looking back, I mean, the one thing that does stand out 119 00:06:08,702 --> 00:06:10,570 is her signature block 120 00:06:10,603 --> 00:06:13,039 had evolved over that brief period. 121 00:06:13,073 --> 00:06:14,307 And under her name was, 122 00:06:14,341 --> 00:06:17,811 "economist, entrepreneur, hustler." 123 00:06:17,844 --> 00:06:20,580 Narrator: Morgan closes the chapter on academia 124 00:06:20,613 --> 00:06:23,583 to pursue more lucrative ventures. 125 00:06:23,616 --> 00:06:25,051 She had basically told a friend, 126 00:06:25,085 --> 00:06:26,262 "I need to go home and make money." 127 00:06:26,286 --> 00:06:28,121 So she comes back to Silicon Valley 128 00:06:28,154 --> 00:06:31,558 in the startup tech, entrepreneur space. 129 00:06:31,591 --> 00:06:33,593 Narrator: Morgan meets a mild-mannered, 130 00:06:33,626 --> 00:06:38,965 Russian-born entrepreneur named Ilya "Dutch" Lichtenstein. 131 00:06:39,065 --> 00:06:41,634 Watkins: He's almost the polar opposite of Heather Morgan. 132 00:06:41,668 --> 00:06:44,471 He doesn't seem to want attention. 133 00:06:44,504 --> 00:06:48,050 Narrator: Nor could their backgrounds be more different. 134 00:06:48,074 --> 00:06:49,476 Lichtenstein grows up 135 00:06:49,509 --> 00:06:52,712 in an affluent Chicago suburb called Glenview. 136 00:06:52,746 --> 00:06:54,581 His parents had emigrated from Russia 137 00:06:54,614 --> 00:06:57,984 to avoid religious persecution. 138 00:06:58,084 --> 00:07:00,086 Lichtenstein meets Charles Austin 139 00:07:00,120 --> 00:07:04,758 in a computer coding class at Glenbrook South High School. 140 00:07:04,791 --> 00:07:06,231 Austin: I would say Glenbrook South's 141 00:07:06,259 --> 00:07:07,927 a pretty typical suburban high school 142 00:07:08,028 --> 00:07:09,605 where you have some of, like, the sort of John Hughes 143 00:07:09,629 --> 00:07:14,100 archetypal tropes of, like, jocks, nerds, et cetera. 144 00:07:14,134 --> 00:07:17,270 We're definitely, obviously, nerds, right? 145 00:07:17,303 --> 00:07:21,474 We're not [bleep] football quarterbacks here, but... 146 00:07:21,508 --> 00:07:24,544 And I think he's sort of underrated as a funny guy 147 00:07:24,577 --> 00:07:27,814 because he was probably very quiet and kept to himself, 148 00:07:27,847 --> 00:07:30,550 but once you start to, like, get to know him, it's like, 149 00:07:30,583 --> 00:07:32,886 "Oh, yeah, I really like this guy, he's cool." 150 00:07:32,919 --> 00:07:34,454 Narrator: They aren't jocks, 151 00:07:34,487 --> 00:07:36,790 but they still like to have a good time. 152 00:07:36,823 --> 00:07:39,559 Austin: Me and whoever was in our lunch group at the time 153 00:07:39,592 --> 00:07:42,362 would just drive over to my place 154 00:07:42,395 --> 00:07:44,297 and play poker for, like, 40 minutes, 155 00:07:44,330 --> 00:07:46,633 keep that game set up, and then come back the next day 156 00:07:46,666 --> 00:07:49,235 and keep playing till we finished the game. 157 00:07:49,269 --> 00:07:51,047 There was nothing remarkable about him 158 00:07:51,071 --> 00:07:52,706 as a poker player. 159 00:07:52,739 --> 00:07:55,051 It's not like it was like, "Oh, damn, he's running the table." 160 00:07:55,075 --> 00:07:56,552 But again, he just, like, fit right in, 161 00:07:56,576 --> 00:07:58,378 and it was fun to play with him. 162 00:07:58,411 --> 00:08:00,847 Yeah. Well, this is something we just stumbled on here... 163 00:08:00,880 --> 00:08:05,552 Photos of 2006 prom from the very end of high school 164 00:08:05,585 --> 00:08:09,089 and it's very funny that the comment on these two photos 165 00:08:09,122 --> 00:08:11,324 from a friend of his is "Ilya with a date? 166 00:08:11,358 --> 00:08:13,493 I don't believe it." 167 00:08:13,526 --> 00:08:15,028 I skipped prom to play poker, 168 00:08:15,061 --> 00:08:17,630 so it's news to me that he went to it. 169 00:08:17,664 --> 00:08:20,033 Narrator: Lichtenstein majors in psychology 170 00:08:20,066 --> 00:08:22,202 at the University of Wisconsin 171 00:08:22,235 --> 00:08:25,372 and heads to San Francisco after graduation. 172 00:08:25,405 --> 00:08:27,674 He tries his hand at several fruitless ventures, 173 00:08:27,707 --> 00:08:33,022 including a Ron Paul website and a brain-supplement business. 174 00:08:33,046 --> 00:08:35,024 He also had a couple of other websites 175 00:08:35,048 --> 00:08:36,883 that were sort of in the dating realm. 176 00:08:36,916 --> 00:08:40,420 One called Adult Friend Grinder 177 00:08:40,453 --> 00:08:44,791 and another one called findgeekgirls.com. 178 00:08:50,730 --> 00:08:52,866 Narrator: Lichtenstein's fortune improves 179 00:08:52,899 --> 00:08:56,403 when he launches a marketing company called MixRank, 180 00:08:56,436 --> 00:09:00,340 getting seed money from backers like Mark Cuban. 181 00:09:00,373 --> 00:09:04,544 Lichtenstein's luck changes on the romantic front, too. 182 00:09:04,577 --> 00:09:06,846 He finds a soul mate in Morgan, 183 00:09:06,880 --> 00:09:11,351 who shares his entrepreneurial drive and sense of adventure. 184 00:09:11,384 --> 00:09:14,387 So it seems like they did start jet-setting pretty soon 185 00:09:14,421 --> 00:09:16,256 after they met each other. 186 00:09:16,289 --> 00:09:19,125 There's photos of the two of them together 187 00:09:19,159 --> 00:09:22,228 in, like, a private jet, standing on the tarmac, 188 00:09:22,262 --> 00:09:25,131 him hanging out with a monkey in Hong Kong. 189 00:09:25,165 --> 00:09:27,534 She has qualities that he doesn't have 190 00:09:27,567 --> 00:09:29,836 of she is more social and outgoing. 191 00:09:29,869 --> 00:09:32,939 You would expect her to be the big entrepreneur before him 192 00:09:33,039 --> 00:09:35,475 because she is willing to put herself in front of everybody 193 00:09:35,508 --> 00:09:38,745 and, like, make a sort of character out of herself 194 00:09:38,778 --> 00:09:40,146 in a way that he never would. 195 00:09:40,180 --> 00:09:42,515 Narrator: Morgan channels her wits and moxie 196 00:09:42,549 --> 00:09:46,353 into her own startup, a company called SalesFolk 197 00:09:46,386 --> 00:09:50,190 that helps businesses craft cold-e-mail pitches. 198 00:09:50,223 --> 00:09:52,034 That was one of the skills 199 00:09:52,058 --> 00:09:54,527 that she seemed to be the proudest of 200 00:09:54,561 --> 00:09:58,965 because she would send cold e-mails or finesse her way 201 00:09:59,065 --> 00:10:03,069 into connecting with people and getting what she wanted. 202 00:10:03,103 --> 00:10:04,371 Narrator: The company motto 203 00:10:04,404 --> 00:10:07,240 captures Morgan's towering ambition... 204 00:10:08,608 --> 00:10:13,013 [ Laughs ] I mean, it's, like, comically meme-worthy. 205 00:10:13,046 --> 00:10:16,516 Goat is obviously the greatest of all-time. 206 00:10:16,549 --> 00:10:20,253 Clearly even in fashioning her branding, she was really leaning 207 00:10:20,286 --> 00:10:22,689 into this kind of underbelly of Silicon Valley 208 00:10:22,722 --> 00:10:26,059 that's, like, the weirdest, the boldest. 209 00:10:26,092 --> 00:10:27,861 So my first question for you is... 210 00:10:27,894 --> 00:10:30,897 Narrator: Lichtenstein offers advice to Morgan and sits 211 00:10:30,930 --> 00:10:34,434 for an interview on her company YouTube channel, 212 00:10:34,467 --> 00:10:37,237 while she off-handedly gives friends a hint 213 00:10:37,270 --> 00:10:40,640 of what he may really be up to. 214 00:10:40,674 --> 00:10:44,244 Heather introduced him as a black hat hacker. 215 00:10:44,277 --> 00:10:47,213 A black hat hacker is a type of hacker 216 00:10:47,247 --> 00:10:50,750 that pursues exploits with malicious intent. 217 00:10:50,784 --> 00:10:53,853 So they not only have these wild sides, 218 00:10:53,887 --> 00:10:57,090 but then I think they probably foster that in each other 219 00:10:57,123 --> 00:10:59,359 and sort of feed off of that. 220 00:10:59,392 --> 00:11:02,195 Narrator: Morgan posts a testament to her boyfriend 221 00:11:02,228 --> 00:11:04,798 in August 2016... 222 00:11:09,069 --> 00:11:12,572 The Bitfinex hack occurs one day later, 223 00:11:12,605 --> 00:11:14,274 and someone's about to start laundering 224 00:11:14,307 --> 00:11:16,710 all that stolen crypto. 225 00:11:18,244 --> 00:11:20,647 Up next on "American Greed," 226 00:11:20,680 --> 00:11:24,217 Morgan unleashes a brash alter ego, 227 00:11:24,250 --> 00:11:27,821 but could her lyrics reveal a little too much? 228 00:11:43,433 --> 00:11:44,868 Narrator: It's one of the biggest 229 00:11:44,901 --> 00:11:46,503 cryptocurrency heists ever... 230 00:11:46,536 --> 00:11:51,241 120,000 bitcoins, then worth $71 million 231 00:11:51,274 --> 00:11:52,676 drained from accounts 232 00:11:52,709 --> 00:11:55,879 in the Bitfinex virtual currency exchange 233 00:11:55,912 --> 00:11:58,482 in August 2016. 234 00:11:58,515 --> 00:12:02,386 The hackers stash the currency in a digital wallet, 235 00:12:02,419 --> 00:12:05,522 a virtual account guarded by a set of private keys, 236 00:12:05,555 --> 00:12:07,224 like a pin code. 237 00:12:07,257 --> 00:12:09,535 Shin: Whoever had the private keys, that they were the only person 238 00:12:09,559 --> 00:12:13,039 who was going to be able to do anything with that money inside. 239 00:12:13,063 --> 00:12:14,331 Narrator: But there's a catch. 240 00:12:14,364 --> 00:12:18,168 All that loot is hiding in plain sight. 241 00:12:18,201 --> 00:12:20,804 Bitcoin was once touted as anonymous, 242 00:12:20,837 --> 00:12:23,774 but every transaction gets permanently logged 243 00:12:23,807 --> 00:12:25,609 on the blockchain... 244 00:12:25,642 --> 00:12:28,945 A public ledger maintained by computer networks. 245 00:12:28,979 --> 00:12:30,914 The strange thing about a cryptocurrency theft 246 00:12:30,947 --> 00:12:34,718 is that you can see that these 120,000 bitcoins 247 00:12:34,751 --> 00:12:38,188 worth a fortune have moved into a specific address, 248 00:12:38,221 --> 00:12:40,257 but they don't know who the thieves are. 249 00:12:40,290 --> 00:12:42,459 It's like just beyond their reach. 250 00:12:42,492 --> 00:12:45,071 Narrator: It's a crime unlike any other 251 00:12:45,095 --> 00:12:46,363 Ali Watkins has covered 252 00:12:46,396 --> 00:12:49,232 on "The New York Times" metro beat. 253 00:12:49,266 --> 00:12:52,302 It was like a huge bank robbery happened, 254 00:12:52,336 --> 00:12:54,871 but then the money just sat outside the bank 255 00:12:54,905 --> 00:12:57,808 in a locked getaway car and no one could touch it. 256 00:12:57,841 --> 00:12:59,476 No one could solve it. 257 00:12:59,509 --> 00:13:01,587 No one could figure out who put it there in the first place. 258 00:13:01,611 --> 00:13:05,024 And it just sort of had this lore around it. 259 00:13:05,048 --> 00:13:07,117 Narrator: A small portion of bitcoins 260 00:13:07,150 --> 00:13:10,654 begin flowing five months after the hack. 261 00:13:10,687 --> 00:13:14,124 Jonathan Levin co-founded Chainalysis, 262 00:13:14,157 --> 00:13:16,293 a company that helps governments and banks 263 00:13:16,326 --> 00:13:20,130 solve high-profile crypto crimes. 264 00:13:20,163 --> 00:13:21,498 Money started to move 265 00:13:21,531 --> 00:13:24,468 through lots of different intermediary wallets 266 00:13:24,501 --> 00:13:29,339 and money ended up going into AlphaBay. 267 00:13:29,373 --> 00:13:32,442 Rabenn: AlphaBay was a dark-web marketplace, 268 00:13:32,476 --> 00:13:35,746 so that's essentially like an Amazon.com 269 00:13:35,779 --> 00:13:37,547 but for bad things. 270 00:13:37,581 --> 00:13:41,385 You could buy drugs, stolen credit cards. 271 00:13:41,418 --> 00:13:43,487 You could pay for money-laundering services 272 00:13:43,520 --> 00:13:47,290 and you could even buy poison if you wanted to kill someone. 273 00:13:47,324 --> 00:13:51,070 It also offered mixing and tumbling services. 274 00:13:51,094 --> 00:13:53,563 These are services in which you, 275 00:13:53,597 --> 00:13:58,635 John Doe, can send your dirty cryptocurrency to AlphaBay 276 00:13:58,669 --> 00:14:02,039 and AlphaBay will then mix it up with other funds 277 00:14:02,072 --> 00:14:03,674 that have been sent to it. 278 00:14:03,707 --> 00:14:07,177 So it kind of acts, if you imagine taking your dirty cash, 279 00:14:07,210 --> 00:14:09,946 putting it into a washing machine. 280 00:14:10,047 --> 00:14:13,250 Narrator: Meanwhile, Heather Morgan and Ilya Lichtenstein 281 00:14:13,283 --> 00:14:15,719 are growing restless. 282 00:14:15,752 --> 00:14:19,122 Morgan struggles to keep SalesFolk profitable, 283 00:14:19,156 --> 00:14:21,091 while Lichtenstein suddenly moves on 284 00:14:21,124 --> 00:14:23,894 from his startup, MixRank. 285 00:14:23,927 --> 00:14:27,040 The couple exchanges the California sunshine 286 00:14:27,064 --> 00:14:29,566 for Manhattan's bright lights. 287 00:14:29,599 --> 00:14:34,438 ♪♪ 288 00:14:34,471 --> 00:14:36,406 Morgan and Lichtenstein rent 289 00:14:36,440 --> 00:14:40,777 a $6,500-a-month apartment on Wall Street. 290 00:14:40,811 --> 00:14:44,214 She furnishes it with animal pelts and taxidermy, 291 00:14:44,247 --> 00:14:46,817 including a crocodile skull, 292 00:14:46,850 --> 00:14:49,753 detailing this and nearly every facet of her life 293 00:14:49,786 --> 00:14:55,158 with Lichtenstein on TikTok and other social media. 294 00:14:55,192 --> 00:14:56,960 This is my current look. What do you think? 295 00:14:56,993 --> 00:15:00,430 Watkins: It reminded you of that really quirky art friend 296 00:15:00,464 --> 00:15:03,009 who everybody says has good taste, 297 00:15:03,033 --> 00:15:04,210 but you're afraid to tell them 298 00:15:04,234 --> 00:15:06,436 they actually have really bad taste. 299 00:15:06,470 --> 00:15:08,839 Narrator: Morgan branches into journalism, 300 00:15:08,872 --> 00:15:12,909 contributing dozens of columns to "Inc." and "Forbes." 301 00:15:12,943 --> 00:15:18,949 Watkins: She just sort of willed herself into this expert space. 302 00:15:19,049 --> 00:15:20,350 How did she do that? 303 00:15:20,384 --> 00:15:22,028 She started writing as if she was an expert, 304 00:15:22,052 --> 00:15:25,088 as if she was an entrepreneur, as if she was successful. 305 00:15:25,122 --> 00:15:29,126 I made my own path as being both a writer, 306 00:15:29,159 --> 00:15:33,664 a software entrepreneur, and a creative. 307 00:15:33,697 --> 00:15:36,099 Narrator: Nearly a year after the Bitfinex hack, 308 00:15:36,133 --> 00:15:38,368 Morgan and Lichtenstein are hardly a blip 309 00:15:38,402 --> 00:15:40,971 on the Justice Department's radar, 310 00:15:41,071 --> 00:15:43,640 but that's about to change. 311 00:15:43,674 --> 00:15:48,679 ♪♪ 312 00:15:48,712 --> 00:15:52,549 Today the Department of Justice announces the takedown 313 00:15:52,582 --> 00:15:56,453 of the dark-web market AlphaBay. 314 00:15:56,486 --> 00:15:58,522 Narrator: In July 2017, 315 00:15:58,555 --> 00:16:02,359 federal authorities shut down AlphaBay. 316 00:16:02,392 --> 00:16:07,197 This is the largest dark-market web-place takedown 317 00:16:07,230 --> 00:16:09,008 in world history. 318 00:16:09,032 --> 00:16:10,701 Narrator: Law enforcement 319 00:16:10,734 --> 00:16:14,171 seizes AlphaBay's main server in Lithuania. 320 00:16:14,204 --> 00:16:17,407 And so suddenly, this thing that had been a kind of, 321 00:16:17,441 --> 00:16:20,077 I don't know, black hole in the middle of the blockchain 322 00:16:20,110 --> 00:16:21,712 is in the hands of the feds 323 00:16:21,745 --> 00:16:24,281 and they can see all the transactions. 324 00:16:24,314 --> 00:16:27,551 Narrator: According to a complaint later filed, 325 00:16:27,584 --> 00:16:29,486 the trove of illicit transactions 326 00:16:29,519 --> 00:16:33,824 will lead directly to Morgan and Lichtenstein. 327 00:16:33,857 --> 00:16:36,193 Brown: AlphaBay offered money-laundering services 328 00:16:36,226 --> 00:16:39,196 and the records associated with these money-laundering services 329 00:16:39,229 --> 00:16:40,797 may have played an important role 330 00:16:40,831 --> 00:16:43,867 in allowing the government to connect the stolen bitcoin 331 00:16:43,900 --> 00:16:47,270 in this case to Ilya, um, Lichtenstein and Heather Morgan. 332 00:16:47,304 --> 00:16:49,539 I think that when that AlphaBay server 333 00:16:49,573 --> 00:16:51,284 ended up in federal law enforcement's hands, 334 00:16:51,308 --> 00:16:53,143 that was probably the beginning of the end. 335 00:16:53,176 --> 00:16:55,846 I feel like I live in two worlds. 336 00:16:55,879 --> 00:17:00,417 Narrator: But as the feds close in, Morgan hardly lays low. 337 00:17:00,450 --> 00:17:03,020 Instead, she announces a new career 338 00:17:03,053 --> 00:17:06,256 after complaining of professional burn-out. 339 00:17:06,289 --> 00:17:08,625 I think I was pretty unhappy. 340 00:17:08,658 --> 00:17:12,362 So she started rapping as a way to deal with the burn-out. 341 00:17:12,396 --> 00:17:16,033 Narrator: Morgan creates a shameless alter ego. 342 00:17:16,066 --> 00:17:18,502 ♪ Razzlekhan, the Versace bedouin ♪ 343 00:17:18,535 --> 00:17:21,271 ♪ Come real far but don't know where I'm headed ♪ 344 00:17:21,304 --> 00:17:23,774 ♪ Crocodile of Wall Street ♪ 345 00:17:23,807 --> 00:17:26,343 ♪ Silver on my fingers and boots on my feet ♪ 346 00:17:26,376 --> 00:17:28,245 Watkins: She's running all over Wall Street 347 00:17:28,278 --> 00:17:30,023 in these insane outfits. 348 00:17:30,047 --> 00:17:32,683 She's making obscene gestures 349 00:17:32,716 --> 00:17:37,087 in, like, very buttoned-up areas of New York in broad daylight. 350 00:17:37,120 --> 00:17:40,924 Narrator: While Razzlekhan apparently shells out big bucks 351 00:17:40,957 --> 00:17:42,259 on rap videos, 352 00:17:42,292 --> 00:17:45,562 IRS agents dissect the blockchain, 353 00:17:45,595 --> 00:17:47,798 inching closer to identifying suspects 354 00:17:47,831 --> 00:17:50,667 they believe are laundering the stolen money 355 00:17:50,701 --> 00:17:53,503 in one of crypto's biggest heists. 356 00:17:53,537 --> 00:17:56,173 Rabenn: Not only do blockchains not lie 357 00:17:56,206 --> 00:17:58,141 no matter how they're designed, 358 00:17:58,175 --> 00:18:01,211 cybercrime, in general, is difficult 359 00:18:01,244 --> 00:18:05,148 because there are little bread crumbs that are left everywhere 360 00:18:05,182 --> 00:18:07,384 unless you're the perfect criminal. 361 00:18:07,417 --> 00:18:09,820 Narrator: Lichtenstein certainly seems to know his way 362 00:18:09,853 --> 00:18:11,521 around the blockchain. 363 00:18:11,555 --> 00:18:15,258 In March 2018, he forms endpass... 364 00:18:15,292 --> 00:18:19,463 A cyber company intended to secure personal assets. 365 00:18:20,197 --> 00:18:23,834 We protect your funds with multiple layers of security. 366 00:18:23,867 --> 00:18:26,503 Shin: You know, they didn't appear to have much traction. 367 00:18:26,536 --> 00:18:28,538 Their businesses were certainly not ones 368 00:18:28,572 --> 00:18:31,441 that would generate a ton of income. 369 00:18:31,475 --> 00:18:33,744 Narrator: Morgan and Lichtenstein's companies 370 00:18:33,777 --> 00:18:35,512 may not be earning much, 371 00:18:35,545 --> 00:18:37,381 but that doesn't stop them from jetting off 372 00:18:37,414 --> 00:18:41,385 to exotic locations on a moment's whim. 373 00:18:41,418 --> 00:18:45,389 Their 2019 summer itinerary includes a month in a place 374 00:18:45,422 --> 00:18:50,394 that's not a typical tourist hotspot... Ukraine. 375 00:18:50,427 --> 00:18:53,697 But are Morgan and Lichtenstein merely on vacation 376 00:18:53,730 --> 00:18:57,067 or up to something far more suspicious? 377 00:18:58,568 --> 00:19:01,171 Up next on "American Greed"... 378 00:19:01,204 --> 00:19:05,442 The government compares this trip to a spy novel. 379 00:19:13,836 --> 00:19:21,836 ♪♪ 380 00:19:22,078 --> 00:19:23,579 Narrator: It's been three long years 381 00:19:23,613 --> 00:19:28,084 since one of cryptocurrency's most notorious heists. 382 00:19:28,117 --> 00:19:31,487 Hackers stole nearly 120,000 bitcoins 383 00:19:31,521 --> 00:19:34,590 from the Bitfinex virtual currency exchange 384 00:19:34,624 --> 00:19:37,593 and stashed them inside a digital wallet. 385 00:19:37,627 --> 00:19:39,662 Someone's been laundering the currency 386 00:19:39,696 --> 00:19:41,097 by siphoning a portion 387 00:19:41,130 --> 00:19:45,034 through a dark website called AlphaBay. 388 00:19:45,068 --> 00:19:49,605 But that's just one of many tactics uncovered by the IRS. 389 00:19:49,639 --> 00:19:52,108 Another branch of it, though, that's more mysterious 390 00:19:52,141 --> 00:19:54,711 goes into a cryptocurrency called monero. 391 00:19:54,744 --> 00:19:58,648 Monero is a secure, private, untraceable currency. 392 00:19:58,681 --> 00:20:01,117 It is open-sourced, decentralized, 393 00:20:01,150 --> 00:20:02,852 and freely accessible to all. 394 00:20:02,885 --> 00:20:06,255 What we see oftentimes in criminal investigations 395 00:20:06,289 --> 00:20:09,492 is that criminals who are sophisticated 396 00:20:09,525 --> 00:20:13,396 use multiple different forms of cryptocurrency 397 00:20:13,429 --> 00:20:16,332 and sometimes move between different cryptocurrencies 398 00:20:16,366 --> 00:20:19,535 in order to try and obfuscate the flow of funds. 399 00:20:19,569 --> 00:20:22,405 Narrator: Exchanging one form of crypto for another 400 00:20:22,438 --> 00:20:25,675 is a laundering technique called chain hopping. 401 00:20:25,708 --> 00:20:28,277 And monero is generally thought to be 402 00:20:28,311 --> 00:20:29,912 pretty untraceable. 403 00:20:29,946 --> 00:20:33,416 Narrator: The IRS has never revealed it can trace monero, 404 00:20:33,449 --> 00:20:36,853 but Andy Greenberg thinks the Bitfinex investigation 405 00:20:36,886 --> 00:20:38,855 may show it can. 406 00:20:38,888 --> 00:20:41,991 And the government reportedly has some help. 407 00:20:42,025 --> 00:20:45,261 Greenberg: There is an entire industry now of companies 408 00:20:45,294 --> 00:20:48,064 who pull apart these blockchains to follow the money. 409 00:20:48,097 --> 00:20:52,168 I would be very surprised if Chainalysis was not involved 410 00:20:52,201 --> 00:20:54,170 in this massive Bitfinex case. 411 00:20:54,203 --> 00:20:57,306 Narrator: Chainalysis co-founder Jonathan Levin 412 00:20:57,340 --> 00:21:01,244 declined to comment on whether his company assisted 413 00:21:01,277 --> 00:21:03,546 the government's investigation. 414 00:21:03,579 --> 00:21:05,948 While authorities say the digital clues 415 00:21:06,049 --> 00:21:07,183 left in the blockchain 416 00:21:07,216 --> 00:21:09,052 will eventually lead to Heather Morgan 417 00:21:09,085 --> 00:21:12,388 and Ilya Lichtenstein's doorstep, 418 00:21:12,422 --> 00:21:16,759 the luxury apartment, lavish travel, and elaborate rap videos 419 00:21:16,793 --> 00:21:19,696 displayed in their numerous online posts 420 00:21:19,729 --> 00:21:23,499 reveal a lifestyle that appears to be far beyond 421 00:21:23,533 --> 00:21:26,936 what their small businesses can provide. 422 00:21:26,969 --> 00:21:31,607 ♪♪ 423 00:21:31,641 --> 00:21:35,378 And yet, they show no sign of slowing down. 424 00:21:35,411 --> 00:21:37,914 Lichtenstein announces their engagement 425 00:21:37,947 --> 00:21:39,482 on Facebook that summer. 426 00:21:39,515 --> 00:21:42,852 It's like the most groan-worthy proposal 427 00:21:42,885 --> 00:21:44,654 I can think of. 428 00:21:44,687 --> 00:21:47,790 Narrator: He describes hiring an advertising agency 429 00:21:47,824 --> 00:21:49,225 to help him propose 430 00:21:49,258 --> 00:21:52,962 to "my best friend and the woman of my dreams!" 431 00:21:52,996 --> 00:21:54,964 Watkins: Ilya took Heather Morgan to Times Square, 432 00:21:54,998 --> 00:21:58,568 where he had put all of these billboards up about Razzlekhan, 433 00:21:58,601 --> 00:22:01,771 who was clearly this alter ego that meant a lot to her. 434 00:22:01,804 --> 00:22:03,840 Narrator: The proposal doesn't come cheap. 435 00:22:03,873 --> 00:22:09,812 A Times Square billboard can run from $5,000 up to $50,000. 436 00:22:10,680 --> 00:22:13,383 The next month, Morgan delivers a curious speech 437 00:22:13,416 --> 00:22:18,121 at a New York City salon series, bragging about having the skills 438 00:22:18,154 --> 00:22:20,390 one might need to pull off a crime 439 00:22:20,423 --> 00:22:23,226 like the one the feds are now investigating. 440 00:22:34,437 --> 00:22:37,306 She had a lot of skills of persuasion 441 00:22:37,340 --> 00:22:39,876 and she used them for all kinds of intents and purposes. 442 00:22:39,909 --> 00:22:42,478 I mean, some of the things that she was talking about was, 443 00:22:42,512 --> 00:22:44,757 you know, like crashing people's weddings and stuff like that, 444 00:22:44,781 --> 00:22:48,451 or figuring out a way to talk to, like, a famous person 445 00:22:48,484 --> 00:22:49,952 or, you know, things like that. 446 00:22:49,986 --> 00:22:52,288 Still, a skill is a skill. 447 00:22:52,322 --> 00:22:53,499 Narrator: The Justice Department 448 00:22:53,523 --> 00:22:55,525 later says Morgan and Lichtenstein 449 00:22:55,558 --> 00:22:57,794 weren't simply wedding crashers. 450 00:22:57,827 --> 00:23:01,130 They used their skills to launder billions of dollars 451 00:23:01,164 --> 00:23:03,700 of bitcoin stolen from Bitfinex. 452 00:23:03,733 --> 00:23:08,171 ♪♪ 453 00:23:08,204 --> 00:23:09,739 The government points to a trip 454 00:23:09,772 --> 00:23:12,241 that Morgan and Lichtenstein took to Kyiv, 455 00:23:12,275 --> 00:23:15,912 the Ukrainian capital, later that summer. 456 00:23:15,945 --> 00:23:20,283 The government compares this trip to a spy novel. 457 00:23:20,316 --> 00:23:22,485 It seemed to be kind of their test balloon of, 458 00:23:22,518 --> 00:23:25,855 you know, how can we get fake identities delivered? 459 00:23:25,888 --> 00:23:29,158 Narrator: One package was reportedly delivered to a hotel 460 00:23:29,192 --> 00:23:33,429 from Vladivostok, Russia, on September 9th. 461 00:23:33,463 --> 00:23:37,042 The Justice Department alleges Lichtenstein created files 462 00:23:37,066 --> 00:23:38,701 with detailed information 463 00:23:38,735 --> 00:23:42,405 about Russian personas the very next day. 464 00:23:42,438 --> 00:23:45,050 Rabenn: The implication is that they had ordered 465 00:23:45,074 --> 00:23:46,642 fake identity documents 466 00:23:46,676 --> 00:23:49,278 to be sent to them in the Ukraine 467 00:23:49,312 --> 00:23:51,114 that potentially they could use 468 00:23:51,147 --> 00:23:54,550 if they ever had to flee the United States. 469 00:23:54,584 --> 00:23:57,887 Watkins: The whole thing is always just a knife's edge away 470 00:23:57,920 --> 00:24:03,626 of either being James Bond or knockoff Austin Powers. 471 00:24:03,660 --> 00:24:08,264 They were either really brilliant or really stupid 472 00:24:08,297 --> 00:24:10,933 or just crazy. 473 00:24:11,034 --> 00:24:15,805 ♪♪ 474 00:24:15,838 --> 00:24:17,273 Narrator: Back in Manhattan, 475 00:24:17,306 --> 00:24:20,843 Morgan and Lichtenstein resume business as usual. 476 00:24:20,877 --> 00:24:25,281 He launches an investment firm called Demandpath. 477 00:24:25,314 --> 00:24:28,251 Morgan expands her digital footprint, 478 00:24:28,284 --> 00:24:31,054 pushing content across social media. 479 00:24:31,087 --> 00:24:36,726 Another interesting part about her Forbes profile is her bio. 480 00:24:36,759 --> 00:24:38,361 She writes... 481 00:24:47,770 --> 00:24:50,373 She wrote an article... 482 00:24:54,177 --> 00:24:55,845 Narrator: In light of her warning, 483 00:24:55,878 --> 00:24:57,513 Razzlekhan's new rap video 484 00:24:57,547 --> 00:25:00,817 contains lyrics that sound rather ironic. 485 00:25:04,420 --> 00:25:07,490 Fishing in general is where someone will try to get you 486 00:25:07,523 --> 00:25:10,460 to hand your password over to them so that they can, 487 00:25:10,493 --> 00:25:12,462 in this case, transfer your funds, 488 00:25:12,495 --> 00:25:15,007 Rewind that. What? Did she really just say that? 489 00:25:15,031 --> 00:25:16,408 Like, rewind that and play it again. 490 00:25:16,432 --> 00:25:18,434 Make sure we heard that right. 491 00:25:21,771 --> 00:25:25,208 Um...[laughs] 492 00:25:25,241 --> 00:25:26,709 Narrator: All this time, 493 00:25:26,743 --> 00:25:30,179 the value of the bitcoin stolen from Bitfinex soars... 494 00:25:30,213 --> 00:25:33,483 From $71 million in August 2016 495 00:25:33,516 --> 00:25:39,522 to nearly $3.5 billion in January 2021. 496 00:25:39,555 --> 00:25:42,291 And federal authorities are now convinced 497 00:25:42,325 --> 00:25:44,661 Heather Morgan and Ilya Lichtenstein 498 00:25:44,694 --> 00:25:48,097 are the ones laundering the crypto. 499 00:25:48,131 --> 00:25:51,267 Up next on "American Greed," 500 00:25:51,300 --> 00:25:54,270 Morgan and Lichtenstein head to the altar 501 00:25:54,303 --> 00:25:56,973 with the feds right on their heels. 502 00:25:57,073 --> 00:26:01,110 ♪ Turkish Martha Stewart! ♪ 503 00:26:12,488 --> 00:26:15,625 Narrator: Four years after someone began laundering bitcoin 504 00:26:15,658 --> 00:26:19,562 stolen from the Bitfinex virtual currency exchange, 505 00:26:19,595 --> 00:26:22,007 Heather Morgan and Ilya Lichtenstein 506 00:26:22,031 --> 00:26:23,466 seem to be thriving, 507 00:26:23,499 --> 00:26:27,503 at least to friends and family in their hometowns. 508 00:26:27,537 --> 00:26:29,706 The handful of people that I've kept in touch with 509 00:26:29,739 --> 00:26:31,507 at high school, 510 00:26:31,541 --> 00:26:33,710 they definitely saw him as successful. 511 00:26:33,743 --> 00:26:36,813 Like, this guy is making money and doing his thing 512 00:26:36,846 --> 00:26:38,081 and doing well, yeah. 513 00:26:38,114 --> 00:26:39,949 Narrator: Projecting an image of success 514 00:26:40,049 --> 00:26:41,951 on social media isn't a crime, 515 00:26:42,051 --> 00:26:45,355 but Morgan takes it to a whole different level. 516 00:26:45,388 --> 00:26:48,124 But I also am a writer, I'm a rapper, 517 00:26:48,157 --> 00:26:50,259 I designed some streetwear fashion 518 00:26:50,293 --> 00:26:53,396 and a bunch of other stuff with surrealistic art. 519 00:26:53,429 --> 00:26:59,044 So I, right now, am basically living my ideal life. 520 00:26:59,068 --> 00:27:00,903 That's it. Razzle dazzle! Agh! 521 00:27:01,004 --> 00:27:02,271 She does this gesture a lot. 522 00:27:02,305 --> 00:27:03,706 Like, she goes like this a lot. 523 00:27:03,740 --> 00:27:06,986 And be sure to razzle dazzle! Agh! 524 00:27:07,010 --> 00:27:09,612 Agh! Agh! Agh! 525 00:27:09,645 --> 00:27:13,349 Shin: It's like not a pretty look, and she loves it. 526 00:27:13,383 --> 00:27:16,252 She, I think, was trying to shock people. 527 00:27:16,285 --> 00:27:19,088 She would talk about "gilfs." 528 00:27:19,122 --> 00:27:20,390 Grandmothers I'd like to, 529 00:27:20,423 --> 00:27:22,001 you can fill in the blank on that. 530 00:27:22,025 --> 00:27:23,860 Grandmother I'd like to [bleep] 531 00:27:23,893 --> 00:27:27,697 ♪ Maybe a grandma, but still a sex symbol ♪ 532 00:27:27,730 --> 00:27:31,534 ♪ Keep the... more nimble than a gimbal ♪ 533 00:27:31,567 --> 00:27:35,838 ♪ Hella, gilfalicious, looking so delicious ♪ 534 00:27:35,872 --> 00:27:39,342 Narrator: Morgan's constant urge to broadcast every facet 535 00:27:39,375 --> 00:27:43,746 of her life can grate on her more reserved fiancé. 536 00:27:43,780 --> 00:27:46,182 And in some of the videos, he can seem 537 00:27:46,215 --> 00:27:49,319 a little bit uncomfortable with being on camera. 538 00:27:49,352 --> 00:27:50,596 Are you going to keep filming me, 539 00:27:50,620 --> 00:27:52,255 expecting something to happen? 540 00:27:52,288 --> 00:27:55,258 What do you want me to do? You just want me to, like, 541 00:27:55,291 --> 00:27:58,061 shove something up my [bleep] and do a little dance? 542 00:27:58,094 --> 00:27:59,305 Watkins: I do still wonder, like, 543 00:27:59,329 --> 00:28:00,697 where did that actually come from? 544 00:28:00,730 --> 00:28:03,976 Like, who was she when nobody was TikToking her? 545 00:28:04,000 --> 00:28:07,337 She was really loved by this small group of friends 546 00:28:07,370 --> 00:28:09,138 and people spoke very highly of her, 547 00:28:09,172 --> 00:28:11,341 said she was a very loyal friend. 548 00:28:11,374 --> 00:28:12,775 Said she was there for them 549 00:28:12,809 --> 00:28:15,411 during some really traumatic life experiences. 550 00:28:15,445 --> 00:28:17,313 So you wonder how much of it 551 00:28:17,347 --> 00:28:22,018 was just escalated for clicks and for online attention. 552 00:28:26,856 --> 00:28:28,291 Rabenn: I see an individual 553 00:28:28,324 --> 00:28:31,661 who seems to be somewhat detached from reality. 554 00:28:34,497 --> 00:28:38,434 And appears to me to be someone who would be likely 555 00:28:38,468 --> 00:28:40,436 to get involved in something like this. 556 00:28:40,470 --> 00:28:45,208 ♪ I'm a [bleep] lizard, married to a God[bleep] wizard ♪ 557 00:28:45,241 --> 00:28:47,810 Their view of the world doesn't quite match up 558 00:28:47,844 --> 00:28:49,479 with how others see it. 559 00:28:49,512 --> 00:28:51,414 Your real self is always your best self. 560 00:28:51,447 --> 00:28:54,617 Razzle dazzle! Stay awkward and weird! 561 00:28:54,651 --> 00:28:56,586 Narrator: Morgan and Lichtenstein 562 00:28:56,619 --> 00:28:59,288 don't seem to realize time is running out. 563 00:28:59,322 --> 00:29:02,325 Aah! 564 00:29:02,358 --> 00:29:06,396 In a government complaint, the IRS shows how it traced 565 00:29:06,429 --> 00:29:09,098 the flow of stolen Bitfinex bitcoin 566 00:29:09,132 --> 00:29:11,801 through several virtual currency exchanges 567 00:29:11,834 --> 00:29:13,979 and foreign e-mail addresses 568 00:29:14,003 --> 00:29:15,471 to financial and business accounts 569 00:29:15,505 --> 00:29:17,340 belonging to Lichtenstein and Morgan, 570 00:29:17,373 --> 00:29:19,742 including their companies SalesFolk, 571 00:29:19,776 --> 00:29:23,279 Demandpath, and endpass. 572 00:29:23,312 --> 00:29:26,849 They cash out of about $2.9 million worth of the money. 573 00:29:26,883 --> 00:29:29,052 As far as I can tell, I think they largely spend it 574 00:29:29,085 --> 00:29:30,586 on themselves. 575 00:29:30,620 --> 00:29:33,999 Narrator: Investigators connect the laundered crypto 576 00:29:34,023 --> 00:29:36,326 to purchases made in Lichtenstein 577 00:29:36,359 --> 00:29:40,229 and Morgan's names for Uber, hotels.com, Sony PlayStation, 578 00:29:40,263 --> 00:29:43,766 and a $500 Walmart card. 579 00:29:43,800 --> 00:29:47,470 So these were very small expenses, not, you know, 580 00:29:47,503 --> 00:29:51,908 buying expensive cars or buying a yacht or buying a house, 581 00:29:51,941 --> 00:29:56,112 but rather the types of expenses that are indicative of someone 582 00:29:56,145 --> 00:29:59,449 who's desperate, who can't actually monetize 583 00:29:59,482 --> 00:30:01,250 the large amount of funds that they have. 584 00:30:01,284 --> 00:30:04,387 It's actually probably easier to just put stacks 585 00:30:04,420 --> 00:30:06,923 of hundred dollar bills in a washing machine 586 00:30:06,956 --> 00:30:08,658 and launder them through a casino 587 00:30:08,691 --> 00:30:14,097 than it is to launder $3 billion of anonymous, hacked bitcoin. 588 00:30:14,130 --> 00:30:16,299 Narrator: The government obtains a search warrant 589 00:30:16,332 --> 00:30:18,601 for Morgan and Lichtenstein's e-mail accounts 590 00:30:18,634 --> 00:30:21,304 in August 2021, 591 00:30:21,337 --> 00:30:24,107 while they're busy planning their wedding. 592 00:30:24,140 --> 00:30:27,443 Hey, we have an announcement. 593 00:30:27,477 --> 00:30:30,546 The fiancés catch wind of the subpoena in a notice 594 00:30:30,580 --> 00:30:32,915 from their Internet service provider. 595 00:30:32,949 --> 00:30:35,418 It didn't seem to concern them because they go 596 00:30:35,451 --> 00:30:38,087 and throw this huge wedding anyway. 597 00:30:38,121 --> 00:30:40,156 This is not your typical wedding. 598 00:30:40,189 --> 00:30:44,527 This is more like a concert, a festival. 599 00:30:44,560 --> 00:30:46,963 Narrator: Morgan is no blushing bride 600 00:30:46,996 --> 00:30:48,564 at their Los Angeles wedding. 601 00:30:48,598 --> 00:30:51,668 She's carried into the ceremony on a royal bed 602 00:30:51,701 --> 00:30:54,937 and performs one of her signature raps. 603 00:30:54,971 --> 00:30:58,107 ♪ Turkish Martha Stewart! ♪ 604 00:30:58,141 --> 00:31:00,843 Narrator: But their honeymoon is short. 605 00:31:00,877 --> 00:31:02,145 [ Knock on door ] 606 00:31:02,178 --> 00:31:04,180 They've been married less than two months 607 00:31:04,213 --> 00:31:07,917 when surprise visitors show up. 608 00:31:07,950 --> 00:31:12,322 Up next on "American Greed," the feds hunt for evidence, 609 00:31:12,355 --> 00:31:14,457 and they claim the crocodile of Wall Street 610 00:31:14,490 --> 00:31:18,361 has no intention of going down without a fight. 611 00:31:18,394 --> 00:31:21,130 Shin: They had $40,000 worth of cash 612 00:31:21,164 --> 00:31:24,267 and plastic bags with electronics inside 613 00:31:24,300 --> 00:31:27,804 and the bag was labeled "burner phone." 614 00:31:27,837 --> 00:31:29,405 Narrator: Want more "Greed"? 615 00:31:29,439 --> 00:31:32,342 Follow us on Instagram, connect on Facebook 616 00:31:32,375 --> 00:31:34,944 and listen to the "American Greed" podcast 617 00:31:34,977 --> 00:31:37,246 wherever you get your podcasts. 618 00:31:37,280 --> 00:31:42,685 We'll be right back. 619 00:31:42,719 --> 00:31:50,719 ♪♪ 620 00:31:51,861 --> 00:31:54,664 Narrator: Federal agents execute a search warrant 621 00:31:54,697 --> 00:31:56,075 at Heather Morgan 622 00:31:56,099 --> 00:32:01,104 and Ilya Lichtenstein's apartment on January 5, 2022. 623 00:32:01,137 --> 00:32:02,672 According to the government, 624 00:32:02,705 --> 00:32:05,541 they seize a trove of evidence implicating the couple 625 00:32:05,575 --> 00:32:09,712 in a scheme to launder stolen bitcoin. 626 00:32:09,746 --> 00:32:12,382 Shin They had $40,000 worth of cash 627 00:32:12,415 --> 00:32:16,119 and plastic bags with electronics inside 628 00:32:16,152 --> 00:32:18,855 and the bag was labeled "burner phone." 629 00:32:18,888 --> 00:32:23,035 Narrator: Agents also find fake passports and two books 630 00:32:23,059 --> 00:32:26,129 with compartments cut into their pages. 631 00:32:26,162 --> 00:32:28,498 They're empty, but the government suspects 632 00:32:28,531 --> 00:32:32,301 this couple hatched an escape plan and accuses Morgan 633 00:32:32,335 --> 00:32:35,405 of doing whatever she can to cover their tracks. 634 00:32:35,438 --> 00:32:39,108 And as they're going through this apartment, 635 00:32:39,142 --> 00:32:41,244 Heather goes to get their cat. 636 00:32:41,277 --> 00:32:44,414 Morgan: Clarissa! 637 00:32:44,447 --> 00:32:48,551 Watkins: As she's going to get the cat from under the bed, 638 00:32:48,584 --> 00:32:50,887 she actually pivots and grabs her phone 639 00:32:50,920 --> 00:32:52,889 and tries to lock her phone. 640 00:32:52,922 --> 00:32:54,223 And they struggle. 641 00:32:54,257 --> 00:32:55,968 They had to, like, wrest it out of her hand. 642 00:32:55,992 --> 00:32:58,594 Watkins: The intention obviously being that Heather knew 643 00:32:58,628 --> 00:33:01,564 that if she locked the phone, it would be a lot harder 644 00:33:01,597 --> 00:33:03,633 for government agents to get into it. 645 00:33:03,666 --> 00:33:07,070 Narrator: Federal authorities are more interested in encrypted files 646 00:33:07,103 --> 00:33:10,306 on Lichtenstein's cloud storage account. 647 00:33:10,340 --> 00:33:13,018 The government suspects they hold the keys 648 00:33:13,042 --> 00:33:16,045 to solving a 6-year-old crime... 649 00:33:16,079 --> 00:33:18,848 Private keys linked to a digital wallet 650 00:33:18,881 --> 00:33:24,153 containing bitcoin stolen from Bitfinex in 2016. 651 00:33:24,187 --> 00:33:25,621 The bizarre thing about bitcoin 652 00:33:25,655 --> 00:33:27,399 is that you can, like, see the money right there 653 00:33:27,423 --> 00:33:28,858 and you can't do anything with it, 654 00:33:28,891 --> 00:33:31,828 you can't retrieve it until you have those keys. 655 00:33:31,861 --> 00:33:33,529 Narrator: While the government 656 00:33:33,563 --> 00:33:35,932 tries to decrypt Lichtenstein's files, 657 00:33:35,965 --> 00:33:37,700 he and Morgan hire attorneys 658 00:33:37,734 --> 00:33:40,737 at a white-shoe law firm called Cahill. 659 00:33:40,770 --> 00:33:45,541 Despite their legal troubles, Razzlekhan keeps on tweeting. 660 00:33:45,575 --> 00:33:47,386 Brown: It's very possible that the defendants believed 661 00:33:47,410 --> 00:33:50,213 that that encryption was strong enough to protect them 662 00:33:50,246 --> 00:33:52,482 from any law-enforcement investigation. 663 00:33:52,515 --> 00:33:54,350 Narrator: And yet, the government says 664 00:33:54,384 --> 00:33:55,652 it breaks the encryption 665 00:33:55,685 --> 00:33:59,222 on Lichtenstein's files within weeks. 666 00:33:59,255 --> 00:34:01,257 They find exactly what they're seeking, 667 00:34:01,290 --> 00:34:03,259 according to a criminal complaint... 668 00:34:03,292 --> 00:34:06,295 A list of private keys to the digital wallet 669 00:34:06,329 --> 00:34:09,432 associated with the Bitfinex hack. 670 00:34:09,465 --> 00:34:11,668 The IRS says the wallet still contains 671 00:34:11,701 --> 00:34:15,538 nearly 95,000 of the 120,000 bitcoins 672 00:34:15,571 --> 00:34:19,375 stolen from Bitfinex six years earlier. 673 00:34:19,409 --> 00:34:22,745 But that's not all they reportedly find 674 00:34:22,779 --> 00:34:24,480 in Lichtenstein's files. 675 00:34:24,514 --> 00:34:29,585 Paúl: They found the document of him searching for Russian 676 00:34:29,619 --> 00:34:33,032 and Ukrainian nationalities and passports. 677 00:34:33,056 --> 00:34:36,526 They found the spreadsheet of all the crypto accounts 678 00:34:36,559 --> 00:34:40,296 and the companies that they were linked to and that was the end. 679 00:34:40,330 --> 00:34:42,365 They really didn't stick that landing of like, 680 00:34:42,398 --> 00:34:43,933 "I would never do something like that 681 00:34:43,966 --> 00:34:45,444 and even I wouldn't be putting these passwords and stuff 682 00:34:45,468 --> 00:34:47,437 on my computer." Like, come on, man. 683 00:34:47,470 --> 00:34:50,673 And I think what that really shows is the confidence 684 00:34:50,707 --> 00:34:52,642 that they had in their laundering techniques 685 00:34:52,675 --> 00:34:54,944 that they thought they couldn't be identified 686 00:34:54,977 --> 00:34:56,179 in the first place. 687 00:34:56,212 --> 00:34:58,214 Narrator: Morgan and Lichtenstein 688 00:34:58,247 --> 00:35:00,717 strike a united front in a final selfie 689 00:35:00,750 --> 00:35:03,486 on January 31, 2022, 690 00:35:03,519 --> 00:35:05,588 while the government closes in, 691 00:35:05,621 --> 00:35:09,092 scooping up the 95,000 bitcoins in the digital wallet 692 00:35:09,125 --> 00:35:13,296 the IRS says Lichtenstein controlled. 693 00:35:13,329 --> 00:35:16,566 Today the Justice Department announced it seized billions 694 00:35:16,599 --> 00:35:19,569 of dollars in stolen cryptocurrency. 695 00:35:19,602 --> 00:35:21,404 Narrator: The value of the bitcoin 696 00:35:21,437 --> 00:35:25,742 taken by the Justice Department has risen to $3.6 billion, 697 00:35:25,775 --> 00:35:28,945 the largest seizure in its history. 698 00:35:29,045 --> 00:35:32,482 U.S. authorities making an arrest in an alleged conspiracy 699 00:35:32,515 --> 00:35:36,085 to launder billions of dollars in stolen cryptocurrency. 700 00:35:36,119 --> 00:35:39,155 Narrator: Federal agents arrest Morgan and Lichtenstein 701 00:35:39,188 --> 00:35:43,393 a week after seizing the stolen bitcoin. 702 00:35:43,426 --> 00:35:45,795 Up next on "American Greed"... 703 00:35:45,828 --> 00:35:48,464 ♪ Razzlekhan, the Versace bedouin ♪ 704 00:35:48,498 --> 00:35:51,501 Narrator: Razzlekhan earns worldwide attention... 705 00:35:51,534 --> 00:35:54,404 but not quite the way she had hoped. 706 00:35:54,437 --> 00:35:56,072 Noah: The bitcoin crimes are nothing 707 00:35:56,105 --> 00:35:57,640 compared to calling this [bleep] rap. 708 00:35:57,674 --> 00:35:59,609 ♪ Always be a goat not a God... ♪ 709 00:36:08,550 --> 00:36:16,550 ♪♪ 710 00:36:17,292 --> 00:36:19,294 A massive crypto bust. 711 00:36:19,328 --> 00:36:20,762 31-year-old Heather Morgan 712 00:36:20,796 --> 00:36:23,632 and her 34-year-old husband, Ilya Lichtenstein, 713 00:36:23,665 --> 00:36:25,534 were arrested in New York this morning. 714 00:36:25,567 --> 00:36:28,270 Narrator: Just hours after authorities arrest 715 00:36:28,303 --> 00:36:30,505 Heather Morgan and Ilya Lichtenstein, 716 00:36:30,539 --> 00:36:34,276 the Justice Department announces charges against them 717 00:36:34,309 --> 00:36:37,145 for their alleged roles in a conspiracy 718 00:36:37,179 --> 00:36:39,314 to launder stolen cryptocurrency 719 00:36:39,348 --> 00:36:43,085 taken during the 2016 Bitfinex hack. 720 00:36:43,118 --> 00:36:45,120 Today the Department of Justice 721 00:36:45,153 --> 00:36:46,588 has dealt a major blow 722 00:36:46,621 --> 00:36:50,826 to cybercriminals looking to exploit cryptocurrency. 723 00:36:50,859 --> 00:36:53,829 Narrator: The value of the 120,000 bitcoins 724 00:36:53,862 --> 00:36:58,042 has ballooned from $71 million at the time of the theft 725 00:36:58,066 --> 00:37:01,403 to $4.5 billion. 726 00:37:01,436 --> 00:37:04,873 This is the largest seizure of cryptocurrency ever 727 00:37:04,906 --> 00:37:06,408 by U.S. law enforcement. 728 00:37:06,441 --> 00:37:07,986 Narrator: If convicted, 729 00:37:08,010 --> 00:37:11,413 the charges carry a prison sentence of up to 25 years. 730 00:37:11,446 --> 00:37:15,117 A federal judge in Washington, D.C., releases Morgan 731 00:37:15,150 --> 00:37:17,586 to house arrest on $3 million bond 732 00:37:17,619 --> 00:37:20,789 but orders Lichtenstein held without bail. 733 00:37:20,822 --> 00:37:23,625 We called them the Bonnie and Clyde of crypto. 734 00:37:23,659 --> 00:37:27,362 Narrator: The headlines stun people who knew them. 735 00:37:27,396 --> 00:37:29,140 Austin: Everyone just started texting each other who knew him, 736 00:37:29,164 --> 00:37:31,266 like, "Get a load of this" kind of thing. 737 00:37:31,299 --> 00:37:32,577 Like, no one expected it from him. 738 00:37:32,601 --> 00:37:34,703 Again it's not surprising that he would be 739 00:37:34,736 --> 00:37:37,706 a relatively successful guy, but there was no hint 740 00:37:37,739 --> 00:37:40,208 that he was prone to any kind of criminality. 741 00:37:40,242 --> 00:37:43,345 I think he's not a bad person. 742 00:37:43,378 --> 00:37:47,049 I think he's probably an opportunist and a greedy one. 743 00:37:47,082 --> 00:37:48,650 Total shock. 744 00:37:48,684 --> 00:37:52,254 Total shock because it was just a wholesale transformation. 745 00:37:52,287 --> 00:37:54,923 I think I understand that there was something 746 00:37:54,956 --> 00:37:56,291 always inside of her 747 00:37:56,325 --> 00:37:58,460 that was hungry for success and attention 748 00:37:58,493 --> 00:38:01,163 and always kind of looking for an angle. 749 00:38:01,196 --> 00:38:02,531 I would love to understand 750 00:38:02,564 --> 00:38:04,800 what the specific set of incentives were 751 00:38:04,833 --> 00:38:07,803 that pushed her to transform so radically. 752 00:38:07,836 --> 00:38:09,371 Roarr! 753 00:38:09,404 --> 00:38:12,574 Narrator: The public can't get enough of Razzlekhan. 754 00:38:12,607 --> 00:38:17,913 Parsing every TikTok video, Instagram post and YouTube rap. 755 00:38:18,013 --> 00:38:21,183 ♪ I'm a... bad... ♪ 756 00:38:21,216 --> 00:38:23,919 ♪ Go on make me a sammich ♪ 757 00:38:24,019 --> 00:38:25,387 The bitcoin crimes are nothing 758 00:38:25,420 --> 00:38:27,255 compared to calling this [bleep] rap. 759 00:38:27,289 --> 00:38:30,592 ♪ Bad... bad... bad... ♪ 760 00:38:30,625 --> 00:38:33,061 Shin: The notion that someone who kind of 761 00:38:33,095 --> 00:38:36,198 had such a goofy social-media presence, 762 00:38:36,231 --> 00:38:40,502 could be laundering $4.5 billion worth of bitcoin 763 00:38:40,535 --> 00:38:43,405 was just something that blew people's minds. 764 00:38:43,438 --> 00:38:45,574 Gotta say, I waited for this day, 765 00:38:45,607 --> 00:38:46,775 I waited for this moment 766 00:38:46,808 --> 00:38:49,678 where society has finally generated to my level. 767 00:38:49,711 --> 00:38:52,748 Lichtenstein: Degenerated. 768 00:38:52,781 --> 00:38:55,751 But perhaps one of the, like, most notorious videos 769 00:38:55,784 --> 00:38:57,319 is the fluffy pancakes one. 770 00:38:57,352 --> 00:38:59,287 Lichtenstein: These are famous pancakes. 771 00:39:00,822 --> 00:39:02,791 Watkins: People have been waiting for years to see 772 00:39:02,824 --> 00:39:07,362 who could have possibly been the evil geniuses behind this. 773 00:39:07,396 --> 00:39:08,897 And then the first thing you see 774 00:39:08,997 --> 00:39:12,601 is that video of her having an episode over pancakes 775 00:39:12,634 --> 00:39:16,605 and the entire Internet was just like, "Really?" 776 00:39:21,343 --> 00:39:24,913 When alleged criminals like these are busted, everybody, 777 00:39:25,013 --> 00:39:27,716 especially in the cybersecurity and the hacker community, 778 00:39:27,749 --> 00:39:29,627 likes to point to them and say, "Look at all the mistakes 779 00:39:29,651 --> 00:39:32,321 they made, look at these buffoons." 780 00:39:32,354 --> 00:39:35,157 You know, they did try very sophisticated 781 00:39:35,190 --> 00:39:38,002 and rare techniques, this dark-web thing, 782 00:39:38,026 --> 00:39:39,494 the use of monero. 783 00:39:39,528 --> 00:39:42,631 And yet somehow IRS criminal investigators 784 00:39:42,664 --> 00:39:45,767 and I believe almost certainly a company like Chainalysis 785 00:39:45,801 --> 00:39:49,504 were able to cut through all of that and follow the money. 786 00:39:49,538 --> 00:39:52,374 Narrator: The government charges Morgan and Lichtenstein 787 00:39:52,407 --> 00:39:55,019 in a detailed criminal complaint 788 00:39:55,043 --> 00:39:57,412 but holds off on indicting them. 789 00:39:57,446 --> 00:39:59,023 The evidence as laid out by the government 790 00:39:59,047 --> 00:40:00,415 in the complaint shows 791 00:40:00,449 --> 00:40:02,017 that both Morgan and Lichtenstein 792 00:40:02,050 --> 00:40:05,387 were pretty deeply involved in the criminal conspiracy. 793 00:40:05,420 --> 00:40:08,123 I would assume that the defense really want to claim 794 00:40:08,156 --> 00:40:10,325 that they're two babes in the woods 795 00:40:10,359 --> 00:40:11,970 and they just sort of happen to get caught. 796 00:40:11,994 --> 00:40:14,663 Narrator: The complaint accuses Morgan and Lichtenstein 797 00:40:14,696 --> 00:40:17,032 of laundering the stolen bitcoins 798 00:40:17,065 --> 00:40:18,667 but not the actual hack. 799 00:40:18,700 --> 00:40:20,435 Well, there are a lot of questions here, 800 00:40:20,469 --> 00:40:23,939 including who did the original hack here back in 2016, 801 00:40:23,972 --> 00:40:27,509 leaving open the possibility that there's more to this story. 802 00:40:27,542 --> 00:40:29,411 Rabenn: There's some connection there, right? 803 00:40:29,444 --> 00:40:30,912 You just don't wake up one day 804 00:40:30,946 --> 00:40:34,316 and your crypto wallet is funded with $3.5 billion. 805 00:40:34,349 --> 00:40:37,019 So either he was directly involved in it 806 00:40:37,052 --> 00:40:39,388 or had some connection to the individual 807 00:40:39,421 --> 00:40:42,224 or group of individuals who were behind it. 808 00:40:42,257 --> 00:40:44,292 Narrator: Though defense attorneys 809 00:40:44,326 --> 00:40:46,461 have argued the government complaint 810 00:40:46,495 --> 00:40:49,431 reveals significant holes, a judge granted a request 811 00:40:49,464 --> 00:40:53,301 to waive their clients' right to a speedy trial... 812 00:40:53,335 --> 00:40:57,172 A sign both sides may be working on a plea agreement. 813 00:40:57,205 --> 00:41:01,309 Lichtenstein and Morgan may have at least one bargaining chip. 814 00:41:01,343 --> 00:41:04,446 Or rather, 7,500. 815 00:41:04,479 --> 00:41:06,615 That's the amount of bitcoins the government says 816 00:41:06,648 --> 00:41:08,684 they believe the couple still controls 817 00:41:08,717 --> 00:41:12,187 in hidden accounts linked to the hack. 818 00:41:12,220 --> 00:41:15,957 They're now worth $146 million. 819 00:41:16,058 --> 00:41:18,193 This is an important case for the Justice Department 820 00:41:18,226 --> 00:41:20,495 because it's a precedent setter. 821 00:41:20,529 --> 00:41:23,198 The message to criminals is clear... 822 00:41:23,231 --> 00:41:26,335 Cryptocurrency is not a safe haven. 823 00:41:26,368 --> 00:41:29,404 We can and we will follow the money, 824 00:41:29,438 --> 00:41:32,140 no matter what form it takes. 825 00:41:32,174 --> 00:41:33,518 Crypto's not going away; we know that. 826 00:41:33,542 --> 00:41:35,053 It's certainly gonna fluctuate. 827 00:41:35,077 --> 00:41:36,712 It's gonna have its ups and downs, 828 00:41:36,745 --> 00:41:41,984 but for so long, these spaces were seen as lawless. 829 00:41:42,084 --> 00:41:44,186 This changes that. 830 00:41:44,219 --> 00:41:45,721 Narrator: Ilya Lichtenstein 831 00:41:45,754 --> 00:41:48,857 remains in federal custody in Alexandria, Virginia. 832 00:41:48,890 --> 00:41:52,394 He declined an interview request, writing... 833 00:42:07,242 --> 00:42:09,578 And as for the crocodile of Wall Street... 834 00:42:09,611 --> 00:42:12,314 Heather Morgan is on house arrest, 835 00:42:12,347 --> 00:42:14,549 a mud puddle of her own making, 836 00:42:14,583 --> 00:42:17,653 with strict limits on Internet usage. 837 00:42:17,686 --> 00:42:21,289 And so, while much of her social media remains online 838 00:42:21,323 --> 00:42:25,761 for everyone to see, she can't shape her own story. 839 00:42:25,794 --> 00:42:31,233 And for Razzlekhan, that may be the worst punishment of all. 840 00:42:31,266 --> 00:42:33,669 You can completely create your own destiny 841 00:42:33,702 --> 00:42:34,870 with words and software. 842 00:42:34,903 --> 00:42:36,304 So that's it for now. 843 00:42:36,338 --> 00:42:39,608 Be sure to follow to see more videos. 844 00:42:39,641 --> 00:42:41,109 Razzle dazzle! 845 00:42:51,586 --> 00:42:54,756 Captions by VITAC... www.vitac.com 846 00:42:54,790 --> 00:43:02,790 ♪♪