Ohio Man Convicted of Stealing Over 712 Bitcoin Subject to Forfeiture | USAO-DC

by James · April 27, 2023

WASHINGTON – An Ohio man was sentenced today to 51 months in prison for stealing over 712 bitcoins that were the proceeds of darknet bitcoin mixer Helix and subject to forfeiture in an ongoing criminal case.

The sentence was announced by United States Attorney Matthew M. Graves, Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, FBI Special Agent Wayne A. Jacobs of the Washington Field Office’s Criminal and Cyber Division, and IRS Special Agent in Charge Darrell J. Waldon of the IRS Criminal Investigation (IRS-CI).

In addition to the prison sentence, U.S. District Court Judge Beryl A. Howell ordered 36 months of supervised release and ordered a forfeiture judgment of $4,881,532.40, and forfeiture of specific property including cryptocurrencies now valued at over $20 million due to the increase in market prices.

According to court documents, Gary James Harmon, 31, of Cleveland, Ohio, carried out a scheme to steal cryptocurrency that was the subject of an ongoing criminal forfeiture case in the case of Larry Dean Harmon, Gary Harmon’s brother. In February 2020, Larry Harmon was arrested for operating Helix, a darknet-based cryptocurrency laundering service known as a “mixer” or “tumbler”. Helix laundered over 350,000 bitcoins – valued at over $300 million at the time of the transaction – on behalf of clients, with the largest volume coming from darknet markets. Law enforcement seized various assets, including a cryptocurrency storage device containing Larry Harmon’s illegal income generated through the operation of Helix, which was subject to forfeiture in the criminal case. However, law enforcement was initially unable to recover the bitcoin stored on the device due to the device’s additional security features.

Knowing that authorities were 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 bitcoins, valued at approximately $4 .8 million at the time, to his own wallet – stealing these funds and obstructing the ongoing criminal proceedings. Gary Harmon further laundered the proceeds through two online bitcoin mixing services before using the laundered bitcoins to finance large purchases and other expenses.

Gary Harmon agreed to forfeit cryptocurrencies and other property derived from the fraudulent proceeds, including more than 647.41 Bitcoin (BTC), 2.14 Ethereum (ETH) and 17,404,400.64 Dogecoin (DOGE). Due to the increase in market prices, the total value of these forfeited properties exceeds $12 million.

In August 2021, Larry Harmon pleaded guilty to money laundering conspiracy in connection with his case.

The FBI and IRS-CI District of Columbia Cyber Crime Unit investigated the case.

Assistant US Attorney Christopher B. Brown for the District of Columbia and Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), both now also members of the National Cryptocurrency Enforcement Team, prosecuted the case, with the assistance of Paralegal Specialists Michon Tart , Angela De Falco and Brian Rickers, and former Paralegal Specialist Chad Byron. Additional assistance was provided by Assistant U.S. Attorneys Segev Phillips and Daniel Riedl for the Northern District of Ohio and CCIPS Trial Counsel S. Riane Harper.