An Ohio resident, Gary James Harmon, has been sentenced to four years and three months in prison for stealing over 712 Bitcoins. These bitcoins were proceeds from the darknet bitcoin mixer Helix and were part of a pending criminal forfeiture case.
According to court documents, Harmon, 31, from Cleveland, conducted a scheme to steal cryptocurrency linked to pending criminal forfeiture proceedings against his brother, Larry Dean Harmon. Larry Harmon was arrested in February 2020 for operating Helix, a darknet-based cryptocurrency money-laundering service, commonly referred to as a “mixer” or “tumbler”. Helix had laundered over 350,000 bitcoins, valued at over $300 million at the time of the transactions. Most of the laundered volume originated from darknet markets.
Authorities seized various assets during Larry Harmon’s arrest, including a cryptocurrency storage device containing illegal proceeds earned through Helix. These assets were subject to forfeiture in the criminal case. However, due to the device’s enhanced security features, the authorities initially couldn’t access the stored bitcoins.
With knowledge that the government was attempting to recover the bitcoins for forfeiture in his brother’s criminal case, Gary Harmon exploited his brother’s credentials. He reproduced the bitcoin wallets stored on the device and secretly transferred over 712 bitcoins, worth roughly $4.8 million at the time, to his own wallets. This act not only stole those funds but also disrupted the ongoing criminal forfeiture proceedings. Gary Harmon then laundered the proceeds through two online bitcoin mixer services and used the cleaned bitcoins to finance significant purchases and other expenses.
Gary Harmon consented to the forfeiture of cryptocurrencies and other properties derived from the fraudulently obtained proceeds, including over 647.41 Bitcoin (BTC), 2.14 Ethereum (ETH), and 17,404,400.64 Dogecoin (DOGE). With the rise in market prices, the total value of these forfeitable properties now surpasses $20 million.
In August 2021, Larry Harmon pleaded guilty to a money laundering conspiracy connected to his case.
This case serves as a significant warning to small businesses operating within the cryptocurrency space. It highlights the importance of robust security measures and the potential legal ramifications of fraudulent activities. Cryptocurrency transactions, although perceived as anonymous, can be traced, and illicit activities can result in serious consequences.
