SDNY / UN GATE, Feb 25 – When Russia announced it will recognize independence for the Donetsk and Luhansk "People’s Republics," eyes turned to the United Nations, full of corruption and ineptitude under Antonio Guterres.
Guterres was nowhere to be seen, only recently back from the Genocide Games in Beijing. His spokesman Stephane Dujarric banned Inner City Press from his noon briefing, which he started late cutting off even others by WebEx. In the room, he took three questions in a row from China state media.
Now after military action began literally during a Security Council meeting, a draft resoluation is out - Inner City Press has published it here and here -- sure to be vetoed, Inner City Press wrote on February 24.
On February 25 it happened. Not only the veto, but abstentions by China (population 1.4 billion and a genocide supported by Guterres), India also with population of 1.4 billion, and the president of the Security Council for March, the UAE. The UN is advertising its obsolescence, like a badge of honor. It is time to move on.
UAE takes over UNSC Presidency March 1. Will they too exclude Inner City Press? Watch this site.
The deep decay of the UN under Guterres came into focus, but its supporters looked away and made excuses. Stand-up here. Song here
At the courts, which Inner City Press while banned from the UN by Guterres covers, Ukraine, fending off troops on its borders and separately an arbitral award to Tatneft, cited both in arguments before U.S. District Court for the Southern District of New York Magistrate Judge Sarah Netburn on February 17. Inner City Press live tweeted it (more on Patreon here), thread here:
now Ukraine v. PAO Tatneft, in which Ukraine is opposing discovery requests by citing troops on its border. SDNY judge says, I understand, but... Ukraine's lawyer Maria Kostytska: There is no justification for these 52 subpoenas from Tatneft. There are troops on Ukraine's border.
Judge: I understand that. But I am concerned with efficiencies in these two litigations. Ukraine wants a protective order entered - not (just) to protect it militarily, but hear to keep documents in the case secret, from the Press and public. Inner City Press may after research oppose this - this week we won some unsealing, here
Tatneft's lawyer: Ukraine wants to delay. We have subpoena-ed financial institutions. [From docket, involved: #BankOfAmerica, #WellsFargo, #MorganStanley, #Santander, #CIBC, #CreditAgricole & #GoldmanSachs (which we're covering #EDNY: US v. Ng.
Ukraine: There are discovery proceedings in four Federal courts, in NY and DC. [So what's the 4th?] We are speaking on behalf of the highest levels of Ukraine's government. The Prime Minister is considering this. There is a mediation upcoming.
Ukraine's lawyer: We are not delaying. We are exercising our recourse against an award based on illegal share purchase using promissory notes. We have not waived this due to estoppel. We have not provided on appeal. So we seek certiorari
Tatneft's lawyer: The discovery could be avoided if Ukraine would secure the judgment. The arbitral award is what it is. We are entitled to pursue discovery without further delay. Judge: Maybe Ms. Kostytska tomorrow will have more info from her client [Ukraine]
Judge: So this is how we're going to proceed -- Ukraine's lawyer: We want to add an additional suggestion, we want reconsideration under Local Rule 6.3, your clear error.
Digging into the docket, we find a declaration by Ukraine citing the US State Department on an "invasion force of 175,000."
This case is Ukraine v. PAO Tatneft, 21-mc-376 (Koeltl / Netburn)
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SDNY COURTHOUSE, Feb 25 – Rickey Johnson a/k/a Nigel Dawn Defarren is in the Metropolitan Detention Center in Brooklyn after being arrested for video threats to four cable TV broadcasters, a US Senator and Representative and others.
On April 15, U.S. District Court for the Southern District of New York Judge Louis A. Kaplan held an arraignment and scheduling conference. Inner City Press covered it.
Johnson's Federal Defender asked that no more than a status conference be set.
Judge Kaplan said that's not his practice. After asking the AUSA about the status of discovery - four terrabytes of data from Instagram -- Judge Kaplan set a motion schedule and a next conference.
The AUSA said that a trial would take no more than a week. Things seemed to be moving fast.
And it was. Jump cut to February 9, 2022; Judge Kaplan held another proceeding, on subpoenas, Inner City Press again covered it, below. And the trial: on February 17, there were questions about the Instagram accounts of Senator Manchin and Rep. Lauren Boebert. The government rested and the Federal Defenders made a motion for acquittal under Rule 29. It was denied.
Before that, the Federal Defenders spoke at length with Johnson, with a long beard and two Marshals behind him, then asked for a sidebar.
After the white noise, Judge Kaplan told the jurors he would see them next Tuesday morning, February 22. The Assistant US Attorney asked about Juror 2. Judge Kaplan said that would have to wait.
On February 21, the US moved to exclude Juror Two, who they claim spoke to Detective Cowan in the hall about the white man killing the Indians for their tobacco and asked why it is The Bronx but not The Manhattan. The Federal Defenders wanted to keep him on the jury, saying these are just his "opinions on matters of history."
Then this: "Alternate Juror no. 2 excused. Government rested."
And from the US Attorney's Office on February 25, this: "RICKEY JOHNSON was convicted yesterday of threatening a federal official and making interstate threats, following a one-week jury trial before the Honorable Lewis A. Kaplan. JOHNSON threatened to kill United States Senator Joe Manchin and Fox News television hosts Greg Gutfeld and Laura Ingraham in direct messages and publicly posted videos on Instagram.... JOHNSON is scheduled to be sentenced by Judge Kaplan on May 25, 2022."
On February 9, Judge Kaplan quashed subpoenas. Inner City Press live tweeted, thread here:
Federal Defenders, representing Rickey Johnson aka Nigel Dawn Defarren, has subpoena-ed Fox News for copies of any policy and procedures manuals maintained by Corporate Security at Fox Corporation." Fox seeks to have the subpoena quashed. I
Fox's lawyer: This does not meet the Nixon standard for admissibility. [Judge says only Judge Schindlin proposed a standard different from Nixon, cites recent decisions confirming that Nixon is the law of the Circuit, from Judge Wood (Skelos) and Ramos (Cole)
Judge Kaplan: You are asking for manuals that go beyond anything Defendant says is relevant. I'd quash these if refiled. I'll deal with this at trial, maybe after the witness has testified. I'd like letter briefs by the end of Friday - if Nixon applies to trial subpoena
Afterward, this: " 3rd Party Movant Fox Corporation represent by attorneys Roger L. Stavis and Steven Mintz. Oral argument heard on the 2/8/2022 letter motion (DI 45) to quash the 1/27/2022 subpoena duces tecum served on Fox Corporation. Court ordered the 1/27/2022 subpoena quashed. The Court instructed Federal Defenders that if there is a 2nd subpoena to Fox Corporation it should be made returnable to the Judges Courtroom Deputy, Andrew Mohan, at the start of trial. Letter briefs are due by 2/11/2022 as to the legal standard for the subpoenas being sought." Watch this site.
The case is USA v. Johnson, 21-cr-194 (Kaplan)
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FEDERAL COURT, Feb 25 – After Ilya “Dutch” Lichtenstein and his wife, Heather Morgan were arrested in lower Manhattan for allegedly trying to launder $3.6 billon in crypto-currency linked to the hack of Bitfinex, they appeared in before Magistrate Judge Debra C. Freeman of the U.S. District Court for the Southern District of New York.
After a lengthy proceeding, conditions of release were set: $5 million and $3 million bond, respectively. Vlog. Then, as Inner City Press predicted at 7 pm, the order was stayed by the DDC - Chief Judge Beryl Howell, pending DDC review. Photo here.
Judge Howell ordered the Marshals to move Lichtenstein and Morgan to DC for an in-person hearing on February 14. There was no provision for a call-in line, so Inner City Press wrote to Judge Howell and counsel to request a call in line. Letter on DocumentCloud here.
On February 14, Judge Howell conducted the hearing, and ultimately detained Lichtenstein while allow Heather Morgan / Razzlekhan out on the NY conditions. Inner City Press live tweeted it, thread here and below.
But on February 24 when Inner City Press covered Magistrate Judge Robin Meriweather's proceeding on Lichtenstein, with Morgan's counsel on the line, Morgan was still detained. Inner City Press live tweeted it here
now Bitfinex hack/launder case of US v. Lichtenstein and Morgan before DDC Magistrate Judge Meriweather.
Assistant US Attorney: Whatever was filing in the SDNY did not address Speedy Trial, so we'd like to address it here. Judge Meriweather: How about March 25 at 3 pm? It will be before [Magistrate] Judge Faruqui.
AUSA: We anticipate starting to produce discovery next week but it will be complex. We'd like to exclude time to discussion resolution before trial as well. Let us exclude from when we filed out motion and March 25. Judge Meriweather: Granted.
Judge Meriweather: We have counsel for Ms. Morgan on the line and we're trying to set a proceeding for her. Counsel: We wish to secure her release on bail. She's been in custody since the 8th. The final piece is securing the bond with a home...
Razzlekhan's lawyer: We anticipate recording the lien against her parents' home in California today - but to get it might take weeks. We want to put in an affidavit. Judge Meriweather: I'd need to coordinate. We'll look into it. So, Monday? Counsel: Yes.
Clerk: Monday the 28th at 2 pm, for Ms. Morgan. If she's still in custody we'll send the info to where she is. Anything else? No. Adjourned.
On February 25, as first reported here, Morgan was actually freed, photo here.
On February 17, DOJ wrote to DDC Magistrate Robin Meriweather, "The parties have agreed to seek a 30-day continuance of the Preliminary Hearing in the Southern District of New York, and a corresponding continuance of proceedings in this Court following any Initial Appearance. The government anticipates that discovery in this case will be voluminous and complex. 4. The government moves, pursuant to 18 U.S.C. § 3161(h)(7)(A), to exclude time under the Speedy Trial Act in the interests of justice from February 17, 2022 until the date of the next status hearing in this case on or before March 18, 2022." Full letter on Patreon here.
OK - now in #Bitfinex hack case of US v. Lichtenstein, now 2d bail hearing, before DDC Chief Judge Beryl Howell.
Judge Howell: We are here on the US' motion for pre-trial detention. The NY facility [MDC] was unable to provide virtual access to the defendants, so I ordered them transported here... I have questions; I have reviewed the Complaint and subsequent filings. Judge Howell: I do not have the pre-trial service report used in the SDNY. Assistant US Attorney: SDNY does not provide it to anyone. We do not have a copy, either. Defense: Neither do we. [True? In SDNY Mag Court, they give the report to the parties]
Judge Howell: Are you not relying on risk of obstruction as well as risk of flight? AUSA: We have concerns about that, sure. Judge Howell: That's how it appears to me. So you are raising risk of flight - but also further dissipation?
AUSA: Yes. Judge Howell: So this concerns the 2016 hack, and attempts to money launder those funds. You have not charged the defendants will the actual hack, correct? AUSA: Correct, your Honor. As currently charged.
Judge Howell: And the government has not named who it believes were the hackers? AUSA: We have not. At the moment. Judge Howell: So the victim(s) could see the Bitcoin in the wallet, but could not access it, correct? AUSA: Yes, Your Honor.
Judge Howell: Defense counsel argue that there is not direct proof. But are you saying that having the private keys to the wallet is direct proof, like the smoking gun? AUSA: Yes, your Honor.
Judge Howell: So, using the private keys found in Defendant Lichtenstein's cloud account, the US was able to seize the $3.6 billion in Bitcoin? AUSA: Yes. Judge Howell: How are you sure it came from the hack? It's just one hop? AUSA: Exactly.
Judge Howell: So when the US seized the bitcoin in Wallet 4F, do you move it? Or just switch the private keys? AUSA: We move it to a new wallet. Judge Howell: As a prosecutor I had experience of bitcoin being taken back from the US, by recreating the seized wallet
Judge Howell: So how secure is this $3.6 billion of bitcoin that the government has seized? AUSA: In the case you're referring to, we only had the hardware wallet, not the keys.
Judge Howell: So it's this is not a possibility with Wallet 4F? AUSA: But there are $100s of millions we haven't been able to seize, more than a hop away. Judge Howell: The defense says there no connection between those and the hack.
Judge Howell: Do you know where the rest of the bitcoin is? and how much it is? AUSA: Some funds have been laundered, in wallets we don't know the location of.
Judge Howell: What links the 24 accounts? AUSA: We traced them to the defendants. Judge Howell: Were these 24 accounts linked to Wallet 4F? AUSA: Yes, they are separately by a single transaction. We have a listing of the private keys.
Judge Howell: So this other money, you can't access it, you just look at it? AUSA: Yes... The cloud account was tied to Mr. Lichtenstein's email. It was a comprehensive offering. Judge Howell: Do you have info that his wife accessed it? AUSA: Common devices.
Judge Howell: You say it was a long password that couldn't be broken in a lifetime. So how did you do it? AUSA: Without getting into specifics, one way is to randomly guess. But sometimes you learn other info to make more educated guesses. It wasn't password 1-2-3
AUSA: Even after we search, the defendants didn't know we could gain access. We didn't seek specific evidence from the search to gain access. Judge Howell: In the cloud account, is it fair to say only the inculpatory files were encrypted?
AUSA: The "personas" file was split between UA meaning Ukraine and RU, Russia. Judge Howell: So the US has an interesting story how it traced the stolen bitcoin to 4 pounds of gold. Was that all shipped directly to Lichtenstein in NY?
AUSA: They were living in SF. Judge Howell: Was it sent only to Mr. Lichtenstein? AUSA: They were living together. 4 pounds of gold were $200,000. Judge Howell: You also have photos of foreign currency. How much? Was it left over from a trip? AUSA: We said, what appears to be substantial.
Judge Howell: So you don't have evidence that defendant Morgan had access to Mr. Lichtenstein's cloud account... These defendants didn't flee. I want to pin down the time frame. What notice did they have from the ISPs? November? AUSA: Yes.
Judge Howell: Did the government fail to get a gag order on the ISP? Or did the ISP not comply? AUSA: Administrative oversight.
Judge Howell: So was it the same ISP that posted to the cloud account? AUSA: No, a different one. Let me consult with my colleague. We have a medium degree of confidence. Let me address of Ms. Morgan has been tricked. No, she is sophisticated & could buy dark IDs
Judge Howell: But the evidence against Mr. Lichtenstein is stronger? AUSA: It's very strong against her. She knows what cold storage is -- Judge Howell: I don't know what it that is. AUSA: Safekeeping. She told financial institutions she got the coins in 2014.
Judge Howell: OK, I'll hear from Mr. Enzer. First, I understand they are a married couple. Still, I'm concerned at conflict of interest in joint representation. It's said Ms. Morgan may be an unwitting recipient of tainted funds.
Judge Howell: It's my feeling I should conduct a Rule 44(c) hearing even in the bail hearing. Enzer: We don't want to delay anything. Feel free to inquire, and do a colloquy. AUSA: Pre arrest we asked for clarification Judge Howell: Mr. Enzer, sit down please.
AUSA: We could see arguments about relative culpability, right up to sentencing. We have seen it in the detention filings. Judge Howell: This wasn't raised in front of the NY Magistrate Judge, she didn't do a Rule 44 inquiry. It would have been appropriate then.
Judge Howell: So Mr Enzer do you really think this inquiry is interfering with clients' 6th Amendment rights? Enzer: I never said that. Judge Howell: Maybe it was another lawyer on the team. Enzer: I did say on the call [Why was there no public call in to that?]
Judge Howell (addresses Lichtenstein and Morgan) - You may waive a conflict. But I am obliged to determine you fully understand the conflict. You may have a counsel appointed, if you qualify. [Billions in bitcoin]
Enzer: They got the subpoena in November 2021, they retained counsel, not Cahill, but prior counsel. In January, they still didn't run, but they retained Cahill, a sign they were taking it seriously. [And retaining prior counsel didn't?]
Judge Howell: Mr. Enzer you say you were shocked they were arrested. I'd be shocked it took so long.
Enzer: By the government's own account it was February 1 -- Judge Howell: So they didn't flee Feb 1-8. But wasn't defendant Morgan recuperating from surgery?
Enzer: Sure there was a January 31 surgery. But she was mobile. She came to Cahill. I could document that. And the snow storm? In NY it doesn't slow anyone. If snow would stop them, home detention would.
Enzer: They are unlikely to flee because it's only in New York they can have children. Their eggs are stored here.
Judge Howell: I think they could do that elsewhere. Enzer: The eggs are good, and they are here. And there is Chainalysis KYC
Enzer: I can't speak to the dark net. I didn't consult an expert about that - the prosecution has more access. But if you're on the dark web, you don't want to do business with someone who's hot.
Enzer: We need bail because we can't access our clients. They were arrested on Tuesday. We tried to visit the jail on Thursday, we were turned away. Friday, a short call on his way to DC. Less than an hour. Today, let than 10 minutes. Ms. Morgan, 2 legal calls
Enzer: I think this evidence may be suppressed --- Judge Howell: This is not a suppression hearing. Enzer: But it goes to the strength of the evidence. Judge Howell: It would turn every bail hearing into a suppression hearing.
Judge Howell: If you are saying the evidence is flimsy, I disagree as I'll explain in a moment. Enzer: The unwitting receipt of tainted funds is not a crime. Judge Howell: There the Know Your Customer communcations, and her pretty clear dissembling Judge Howell: What about the false personas?
Enzer: We're talking about Ms. Morgan. Judge Howell: Some of the personas were female.
Enzer: Their families are here. They would give up their homes. We can't prepare for trial if they're in jail. Judge Howell: The DC Jail give iPad for evidence. They allow video conferencing. And contact visit. Enzer: There's Ms. Morgan's health
Enzer: Over the weekend Ms. Morgan had a very serious asthma attack... She had a previous case of MERS. Bernie Madoff got bail. Lee Harmon got bail... Judge Howell: Government? AUSA: These defendants used complex routes.
AUSA: It's said they are so committed to having children. But that's hard, if you're in jail for 25 years. Judge Howell: Let's take 5 minutes. Enzer: I have 12 letters. Judge Howell: My court reporter needs a break. You'll have to repeat that.
Judge Howell is back. Enzer: We have 12 letters of support. Judge Howell: It's a little late in the day, when I'm about to rule. This is the kind of thing that's usually filed on the record, so I see them before I come out on the bench. But give them to me.
Judge Howell: Then file them not as a motion but as a notice. I see that some letter call him "Dutch." Enzer: Yes, it's an a/k/a in the caption of the complaint. Judge Howell (after a pause) OK I've read them. I'm prepared to rule.
Judge Howell: The still unidentified hacker transferred bitcoin from the exchange to Wallet 4F. I agree with the NY Magistrate Judge this case involved sophisticated means... There was the file, "Passport_Ideas." And "vetted vendors" about the dark web. Judge Howell: There was a vendor with fake Ukraine passports, and the defendants were in Kiev on that day. There were bags, with SIM cards and phones, one of which was labeled "Burner Phones."
Judge Howell: On January 5, she grabbed a phone and attempted to lock it. Law enforcement had to wrest if from her. The NY Magistrate put weight on "no flight." I'll address that in a second.
Judge Howell: The defense claims there is no direct proof is a vast over simplification. Lichtenstein's cloud account held the keys.
Judge Howell: Defendant Lichetenstein had a list of the accounts. He had wallets with file names containing variations of the word "dirty." I agree with the NY Magistrate that the evidence against Ms. Morgan is not as strong. But she actively concealed
Judge Howell: Defendant Lichtenstein renewed his Russian passport in 2019. It seems Defendant Morgan spoke to him in Russian. I disagree with the NY Magistrate on the "didn't flee" issue.
Judge Howell: If anything, the delay gave the defendants false confidence. Defendant Lichtenstein will remain in detention, given his access to the private keys. As to Defendant Morgan, she will be released on the NY conditions.
Enzer: Your Honor, the government consents for Lichtenstein to be moved (back) to jail in NYC.
Judge Howell: No, he is a DC defendant. He will stay here. Acela is running. You are excused.
On February 10, the US filed a supplemental memo to detain them (and reverse SDNY Magistrate Judge Debra C. Freeman's order allowing release on bond). Inner City Press quickly tweeted some of the photos, here
In US v. Lichtenstein & Morgan, now in DDC Court DOJ puts in a chart of Bitfinex hack laundering they allege - including through #Uber, #WalMart, Hotels [dot] com and #PlayStation. [Here]
Among Ilya Lichtenstein's Passport_Ideas files, this: "real russian passport from Lugansk. Must pick up in person." Also, "eu doc fakes." [Here]
More from the DOJ filing in DDC: "Morgan posted photos to social media during her trip indicating that she was staying at a Hilton hotel near the 11 Mirrors Design Hotel. Document titled “ukraine_package,” explains “how to anonymously receive a parcel in Ukraine”
At last - photo of the "burner phone" bag in Lichtenstein's and Morgan's lower Manhattan apartment [Here]
On February 9, a schedule: "as to ILYA LICHTENSTEIN, HEATHER RHIANNON MORGAN: defendants' opposition to 8 Motion for Review of Release Order due by 5:00 PM on 2/9/2022; government's reply due by 2:00 PM on 2/10/2022; Motion Hearing scheduled for 2/11/2022."
Inner City Press live tweeted the SDNY proceeding, thread here.
The substantive case, in DDC, is US v. Lichtenstein, et al., 22-mj-22 (RMM)
The SDNY cases: US v. Lichtenstein, 22-mj-1279 (Freeman) and US v. Morgan, 22-mj-1280 (Freeman)
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