US DOJ sues founder of defunct Crypto Mixer for failure to pay $60 million in fines

The US Department of Justice (DOJ) has sued Larry Dean Harmon, the founder of defunct cryptocurrency mixer Helix, for failing to pay a $60 million civil fine since his indictment in 2020.

The trial was archived in the US District Court for the District of Columbia on Wednesday. According to the filing, the $60 million fine was imposed on Harmon after he pleaded guilty to the charges against him in 2020.

Helix laundered over $300 million

In December 2019, the Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, charged the Helix creator with violating the federal Bank Secrecy Act (BSA). The agency accused the developer of conspiring to launder monetary instruments and operate an unlicensed money transfer business through its cryptomixer.

Prior to the indictment, Harmon operated Helix as a crypto drum from June 2014 to December 2017. During its active years, Helix processed over $311 million in more than 1.2 million transactions.

In July 2017, Harmon became CEO of Coin Ninja, a crypto exchange that also provided mixing services. The firm also offered DropBit, a service that allowed users to send and receive bitcoins through text messages and Twitter handles without going through know-your-customer (KYC) procedures.

FinCEN noted that Coin Ninja, DropBit and Helix were not registered as money services businesses during their operations.

DOJ seeks interest and costs

Harmon pleaded guilty to the money laundering charge last August. FinCEN imposed a $60 million penalty on him for “willful violation” of the Anti-Money Laundering (AML) Act.

But since then, Harmon has not paid the penalty fee, hence the DOJ’s latest lawsuit. The filing asked the court to order Harmon to pay the fine plus interest and costs.

“The United States respectfully requests that the Court reduce the civil penalty imposed by FinCEN against Harmon to judgment by awarding the United States a money judgment in an amount to be determined by the Court, plus interest as provided by law, and awarding such other relief as the Court deems just and correctly”, it said.

In the meantime, the court postponed Harmon’s sentencing pending cooperation with the US government.