WASHINGTON, D.C. — A 31-year-old Ohio man was sentenced Thursday to four years and three months in prison for stealing more than 712 bitcoin, proceeds of the darknet bitcoin mixer Helix and subject to forfeiture in a then-pending criminal case, the assistant attorney general of the Justice Department’s criminal division said.
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Gary James Harmon, 31, of Cleveland, perpetrated a scheme to steal cryptocurrency that was the subject of pending criminal forfeiture proceedings in the case of his brother, Larry Dean Harmon, according to documents in U.S. District Court in Washington, D.C.
Kenneth Polite Jr., assistant attorney general of the Justice Department’s criminal division, U.S. Attorney Matthew Graves for the District of Columbia, Assistant Director Bryan Vorndran of the FBI’s Cyber Division, Special Agent in Charge David Sundberg of the FBI Washington Field Office, and Acting Special Agent in Charge Kareem Carter, IRS Criminal Investigation (IRS-CI) Washington, D.C. Field Office made the announcement.
In February 2020, Larry Harmon was arrested for his operation of Helix, a darknet-based cryptocurrency money laundering service, known as a “mixer” or “tumbler.” Helix laundered more than 350,000 bitcoin – valued at more than $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from darknet markets, Polite said.
Law enforcement seized various assets, including a cryptocurrency storage device containing Larry Harmon’s illegal proceeds generated through the operation of Helix, which were subject to forfeiture in the criminal case. However, law enforcement was initially unable to recover bitcoin stored on the device because of the device’s additional security features.
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Knowing that the government was seeking to recover the bitcoin stored on the seized device for forfeiture in Larry Harmon’s criminal case, Gary Harmon used his brother’s credentials to recreate the bitcoin wallets stored on the device and covertly transfer more than 712 bitcoin, valued at approximately $4.8 million at the time, to his own wallets. He stole those funds and obstructed the pending criminal forfeiture proceeding.
Gary Harmon further laundered the proceeds through two online bitcoin mixer services before using the laundered bitcoins to finance large purchases and other expenditures.
Gary Harmon agreed to the forfeiture of cryptocurrencies and other properties derived from the fraudulently taken proceeds, including more than 647.41 Bitcoin (BTC), 2.14 Ethereum (ETH), and 17,404,400.64 Dogecoin (DOGE). Because of the increase in market prices, the total value of these forfeitable properties exceeds $20 million.
In August 2021, Larry Harmon pleaded guilty to money laundering conspiracy in his case.
Th FBI and the IRS-CI District of Columbia Cyber Crime Unit investigated the case.
