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An unlikely husband and wife team are alleged to be the Bitcoin Bandits who have been evading international teams of investigators since the 2016 Bitfinex crypto-currency theft. Prosecutors are arguing that they are flight risks.

The FBI was able to seize $3.6 billion worth of bitcoin from crypto wallets controlled by the couple. The money had been traced directly to the original bitcoin theft.

The Department of Justice says this is the largest single seizure of money in its history.

The hipster New York couple was charged Tuesday with money laundering and conspiracy to defraud the US.

They were briefly granted bail. With the judge granting Ilya “Dutch” Lichtenstein bail of $5 million and his 31-year-old wife Heather Morgan bail a $3 million dollar bail. 

The pair are remaining in custody since the government is appealing the ruling. The prosecution is arguing that the Lichtenstein's are serious flight risks. 

Bitcoin bandits “from the pages of a spy novel”

Apparently, they were secretly setting up bank accounts in Russia. And they had also traveled to Ukraine to obtain false identity documents, authorities said.

According to court documents filed by the prosecution, “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.”

The feds are alleging that Lichtenstein and Morgan have “access to numerous fraudulent identities and documents purchased on the darknet, and the ability to easily acquire more.” And they appeared to “have been setting up a contingency plan for a life in Ukraine and/or Russia prior to the COVID-19 pandemic.”

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.

Prosecutors also say the Lichtenstein’s most probably still have control over crypto accounts containing $328 million. And have their proven expertise in creating false identities through the dark web. And know how to set up bank accounts under fake names.

“The couple’s activities in Ukraine at times appear pulled from the pages of a spy novel,” court documents claim. And it was reported that Netflix is already working on a movie about the couple.

Search warrants seizures 

During the search of the couple’s Wall Street apartment on January 5th investigators found over 50 electronic devices. They also found bags containing multiple cell phones and SIM cards under the couple’s bed. And this includes a bag marked “burner phones.” The authorities also found foreign currency, hollowed out books and false identity documents.

Prosecutors claim that Morgan attempted to lock out a phone to make it harder for investigators to examine. And the device had to be “wrestled away from her.”

$40,000 in cash, both in U.S. dollars and foreign currencies were seized. Investigators uncovered evidence that the couple had purchased 70 gold coins, but they were not found.

Their attorney claims couple not flight risks

Although attorneys declined to comment on the new court filing, they have previously argued the Lichensteins knew they were under investigation since November 2021. And they had not tried to leave the US. Their attorneys also noted that both the couple’s parents were required to put up their homes, as security, for bail conditions.

And on Friday an attorney for Morgan and Lichtenstein claimed that they are not flight risks. Because Morgan’s frozen her eggs are in New York City she would not want to leave the area.

The couple's attorney argued that they would not leave Ms. Morgan’s frozen eggs behind, writing in a legal filing that she “previously froze several of her embryos at a hospital in New York in anticipation of starting a family together, as she can only conceive through in vitro fertilization because she suffers from endometriosis”.