Agents had to ‘wrest’ a phone out of the hands of one of the accused bitcoin launderers as she repeatedly tried to lock her phone

• Heather Morgan allegedly tried to lock her phone when police searched her apartment.
• The entrepreneur-turned rapper and her husband are accused of a $4.5B bitcoin-laundering plot.
• The duo also made plans to flee to Eastern Europe, prosecutors allege.

As law enforcement agents searched her New York apartment in early January, Heather Morgan crouched next to a nightstand and repeatedly hit the lock button on her phone, according to federal prosecutors.

Morgan, and her husband Ilya Lichtenstein, a dual US-Russian citizen, were under investigation about a plot to launder $4.5 billion in stolen bitcoins through an elaborate maze of online accounts and identities.  The authorities found foreign currency, hollowed out books, various electronics devices and a bag labeled “burner phone,” among other items during the search of their apartment, according to a court filing by the US Department of Justice on Thursday.

As agents searched the couple’s apartment, Lichtenstein and Morgan asked to leave the apartment and take their cat, Clarissa, with them. Clarissa was hiding under the bed at the time, according to the filing.

It was at that point, according to court filings by prosecutors, that Morgan attempted to disable her phone.

“Agents permitted Morgan to retrieve the defendants’ cat, which was hiding under the bed. While Morgan was crouched next to the bed calling to the cat, she positioned herself next to the nightstand, which was still holding one of her phones. She then reached up and grabbed her cell phone from the nightstand and repeatedly hit the lock button. It appeared that Morgan was attempting to lock the phone in a way that would make it more difficult for law enforcement to search the phone’s contents. Law enforcement had to wrest the phone from her hands.”

The filings add new details to a story that has captivated the public’s attention and shocked friends, colleagues, and acquaintances of the millennial couple — many of whom told Insider they could not imagine the quirky but otherwise unremarkable duo to be capable of pulling off the elaborate crime that prosecutors allege. The couple’s legal team has argued that the government’s case has “significant holes,” according to a Bloomberg report.

Prosecutors speculate that the couple also prepared for life in Russia. In 2019, they allegedly spent a month in Ukraine picking up shipments from darkweb vendors and orchestrating a “contingency plan.” Morgan, a Californian who spent many years abroad in countries like Egypt and Hong Kong, was learning Russian. The couple had a “brief conversation” with each other in Russian at the time of their arrest, according to the filing.

Prosecutors painted the picture in their court filings of a couple whose activities “appear pulled from the pages of a spy novel.”

Read Insider’s full report on the alleged plans to flee and the prosecutors’ case against the couple »