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Bitcoin ‘heist’ suspect Heather Morgan lived in Hong Kong

  • Cash from huge, unsolved crypto theft has finally been found, investigators say
  • One time Hong Kong resident juggled careers, tried to be rap star
  • The ultimate techy couple hid in the glare of publicity, her face on billboards
  • Theft was from Hong Kong company – and so was part of the laundering operation

A GAWKY YOUNG WOMAN from California arrived in Hong Kong about 11 years ago. She signed up for Cantonese lessons. Because she knew hardly anyone in the city, she just started sending out emails to strangers, trying to make connections. It worked. Writing persuasive emails: that was her special skill, she thought–and one day might make her fortune.

Heather R Morgan, 21 years old, had just graduated from university, but was mature for her age. A friendly blur of creative energy with a strong focus on making a business success of herself, she fitted perfectly into the Hong Kong scene.

In August of that year, 2011, she got a job as a project assistant at Hong Kong University of Science and Technology under the Language Center. But she also kept up her academic sideline working as a research assistant for her economics professor in California, UC Davis, focused on analysis of the so-called Arab Spring. She also applied to do a post-graduate degree in economics.

And there was a third element to her career plan, too: Heather Morgan wanted to start her own business-to-business company, which she would call SalesFolk – this would be a vehicle to package her capitalistic energy and skill with emails, and sell it in multiple forms: she would be a B2B sales consultant, business writer and conference speaker. The Queen of Cold Emails. (Cold as in “cold-calling” — Heather was a friendly person.)


Which track to follow? She decided to do it all. In 2013, she moved to Cairo, to follow her interest in Arab politics, and complete a post-graduate degree, a masters in economics and international development. Considering herself a language whiz, she added Arabic to her CV (on Linked-In, naturally) next to Cantonese.

But it was her interest in the technology side of business that eventually become her main thing. She returned to California in 2013 to turn SalesFolk into The Next Big Thing.

Hardworking and smart, she did pretty well – and soon had a decent presence on the internet as a B2B sales consultant.


Some time that year, it appears, she met a young man, three years her senior, who everyone called Dutch. His actual name was Ilya Lichtenstein, and he was in the technology sector too, having been involved with several start-ups. He had graduated from the University of Wisconsin-Madison with a bachelor’s degree in psychology. However, making money through the internet was his passion too, and he was soon marketing himself as a specialist in blockchain and other new generation tech tools.

Their first public steps in their romance were very post-millennial: in 2013, he signed a testimonial for publication on her website to declare what a good sales consultant she was. In 2014, Dutch Lichtenstein appeared as a guest on Heather Morgan’s YouTube channel.  

Clever and attractive, they were the ultimate techy twentysomethings: Photo: social media


Fast forward to 2016, and back to Hong Kong as location: An astounding robbery took place. The Hong Kong based cryptocurrency exchange Bitfinex said it had suffered a major security breach. Hackers had broken in and taken 119,756 bitcoins.

At the time, the value was an eye-watering US$72 million, but the price dropped worldwide as people all over the world panicked about the safety of their crypto savings accounts. And then it started to climb again.

The hack was considered extraordinary, as the site used multi-signature security, said to be impregnable. But it was a bank robbery of these futuristic times – no guns, no getaway car, no police: just huge amounts of cash, literally just quietly vanishing from one place, and re-appearing in an untraceable location.

It was a huge sum – but was about to get MUCH bigger. As bitcoin recovered, the value of the stolen coins rose up and up to stratospheric levels, climbing in the following years to hundreds of millions of dollars and ultimately to about US$4 billion.

A stolen sum of US$72 million rose to about US$4 billion. Photo by Michael Förtsch on Unsplash

The massive heist, the second biggest crypto robbery in history at that time, went unsolved. And as the years went by – this happened six years ago – it appeared that it would never be solved.


And what of our techy couple, Heather and Dutch?

Nothing special. Perhaps. Reporters from Forbes magazine would later notice that during the month of the hack, she posted a photo to Instagram showing the two of them on a blue satin sofa. The caption: “I always love getting into trouble w/ this crazy guy.”

They liked to travel: image from her Spotify profile

Was there a dramatic change in their lifestyle that outsiders could see? Hard to tell. They did seem to be enjoying the good life, with international holidays, Mexico and Malaysia among their destinations. But nothing too attention-grabbing.

She loved art and creativity, and did some wacky things herself – ridiculously, she tried to launch a career as a rapper named Razzlekhan, with a professionally produced rap video, although even the kindest of friends would have to say that her musical skills were extremely limited. In an essay, she said she did it as a form of therapy, although she took it very seriously.

She had the money to do it, and soon had several tracks out and a website devoted to her rap persona.

And Dutch joined in too. At one point, her rap personality Razzlekhan appeared on numerous billboards in New York City and even appeared in the famous Times Square–courtesy of her boyfriend, who had them erected as a sort of marriage proposal that he believed she would like. He was right. She loved it and said yes.

Her music tracks are still available on Spotify. By normal standards, the tracks are unlistenable–but given the way her story develops, they will no doubt now take their place as part of the myth.

Morgan and Lichtenstein certainly didn’t stop working, although perhaps Heather focused on rather less stressful occupations. In 2017, she started writing columns for Forbes and other business magazines, chatty first-person pieces giving business advice. Her Forbes bio read partly as follows: “When she’s not reverse-engineering black markets to think of better ways to combat fraud and cybercrime, she enjoys rapping and designing streetwear fashion.”

Heather Morgan wrote articles for her website and magazines on sales techniques


One day, Heather Morgan met staff at the bank she used. She told them that clients of her company SalesFolk wanted her to accept payments in bitcoin. She also told them that her husband (the pair married in 2019) had given her some bitcoin, and she had decided to use it to help expand her business. All very plausible.

Dutch Lichenstein gave similar stories to his bankers to explain the transfer of more than US$2 million in bitcoin to accounts of companies he ran, which did things like make small investments in promising technology firms.

But US tax department investigators had been looking for the missing bitcoins for years, and noticed sums of money and crypto moving around the accounts of the couple.  

A special agent was on the job

So Salesfolk’s customers were paying in bitcoin? Agents started checking. They found no evidence that this was true.

“Special agents were unable to corroborate Morgan’s statement with any actual payment details or publicly available information about SalesFolk’s acceptance of BTC as payment,” agent Christopher Janczewski would later note.


In fact, agents found only one transfer of money in bitcoin in the SalesFolk accounts. It received about US$130,000 worth of virtual currency from a Hong Kong firm.

The records for Heather Morgan’s company, Salesfolk, said that the Hong Kong company paid US$130,000 in cryptocurrency to Salesfolk for “advertising services”.

But the Internal Revenue agents did some checking. The firm had no website. And what did it do, anyway? The answer was: nothing. Agents noted that there appeared to be no legitimate business activity of any kind. Why would a firm that did nothing pay US$130,000 for advertising the fact that they didn’t do anything? The Hong Kong firm appeared to be as real as Razzlekhan’s rap career.

The agents dubbed the Hong Kong firm “Shell Company 1”. And they started to pay attention to the couple, watching the way money moved in relatively small chunks in large numbers of cases. They started to draw diagrams (picture above).


Yet it was not Heather Morgan’s activities through Salesfolk, but an act by her husband that broke the case open.

He decided to keep their data in a secure, private cloud storage account. But the US government can access such accounts. The power of US government investigators to get into almost any account anywhere is legendary.

Agents got in to Dutch’s cloud account and found a file there. It was securely encrypted. Agents decrypted it. (The US government has powers that other nations can only dream of.)

As the details spooled onto their screens, they saw it was a list of 2,000 virtual currency “addresses”. Each one came with a code, which functioned as a private key.

They crosschecked it with another list: the record of virtual addresses of bitcoins from the 2016 heist at the Hong Kong Bitfinex exchange.

Many of the numbers matched.



Last week, Heather Morgan was still living her best life. Her Facebook account showed her with a cat. She appeared to remember her time in Hong Kong by posting on social media a Chinese New Year image, the words “kung hei fat choi” in English. “My favorite holiday!” she wrote.


Morgan and Lichtenstein were arrested on Tuesday this week.  Special agent Christopher Janczewski of the Internal Revenue Department filed a 20 page affidavit. This does not directly accuse either of them of hacking the bitcoin exchange, but does accuse them of laundering the stolen funds, an easier case to prove, given the evidence in hand.

It says the pair used Salesfolk and other companies they owned to move the stolen bitcoins “through thousands of transactions to over a dozen accounts”.

The couple is due to appear at another court hearing on Friday.

The movie will follow in good time.

For another extraordinary business story, click here to read about a stock exchange that went from zero to being bigger than the London equivalent in a single generation–and the investor who rose with it.

Image at the top comes a Razzlekhan video

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