Ohio man steals $21 million in Bitcoin from brother, gets four years in prison

Gary James Harmon of Ohio was sentenced to four years and three months in prison for stealing 712 Bitcoins belonging to his brother, the US Department of Justice has announced.

Harmon pleaded guilty to criminal charges in January, facing one count each of wire fraud and obstruction of justice, carrying a combined maximum sentence of 40 years.

The 712 Bitcoins in question—worth over $21 million at today’s prices—were taken from Harmon following the arrest of his brother in February 2020. According to the Department of Justice, the funds were worth about $4.8 million at the time they were taken.

Harmon’s brother, Larry Dean Harmon, was arrested in February 2020 for running a coin mixing service called Helix, which processed over 350,000 Bitcoins between 2014 and 2017 and cooperated with several darknet markets, the Justice Department said.

Larry Dean Harmon later pleaded guilty to money laundering conspiracy and wire transfer charges in 2021. In addition to the criminal charges, Larry Dean Harmon was hit with a $60 million penalty by The Financial Crimes Enforcement Network (FinCEN ), first penalty imposed again on a Bitcoin mixer.

As part of that prosecution, police seized several assets, including a “cryptocurrency storage device” that was not initially accessible due to certain security features, the Justice Department said.

Gary James Harmon was able to “covertly” send himself 712 Bitcoins on the device by recreating Bitcoin wallets with his brother’s credentials. Harmon then further laundered the assets, sending the newly minted bitcoin to two other online mixing services, authorities said.

When he agreed to hand over assets stemming from the 712 Bitcoins he illegally took, he agreed to forfeit cryptocurrencies that included 17.4 million Dogecoin, around 647 Bitcoin and just over 2 Ethereum – together valued at over $20 million of Ministry of Justice.

Although advocates of coin mixers have called them necessary tools to maintain the privacy of crypto transactions, government officials have targeted the services, deriding them as crucial to hackers and other bad actors.

Coin mixers obscure the source and destination of funds by grouping different transactions together. And last summer, the US Treasury Department announced sanctions against coin mixer Tornado Cash, essentially prohibition people in the United States from engaging with the application.

The Treasury Department said Tornado Cash was used by the North Korean state-backed hacking organization Lazarus Group. The move drew condemnation from politicians such as representative Tom Emmer and whistleblower Edward Snowden, who called it a “​​​​do it or die” moment for crypto.

The crypto policy non-profit Coin Center is currently suing the Treasury Department, accuse it of the government’s excessive reach in blacklisting the tool. And although his trial is pending, a Dutch court recently ruled that a Tornado Cash developer named Alexey Pertsev could be released on bail after spending nine months in custody.

Noting his freedom on Twitter on Friday, Pertsev wondered what had been going on in the crypto space since his arrest last August.