Ohio man pleads guilty to unlawfully stealing over 712 confiscated bitcoins forfeited in Brother’s pending criminal case | USAO-DC

Defendant’s brother convicted of operating Helix money laundering service

WASHINGTON — Gary James Harmon, 31, of Cleveland, Ohio, today pleaded guilty to committing a scheme to steal cryptocurrency criminally owned by Harmon’s brother, now-convicted money launderer and Grams-Helix owner Larry Dean Harmon was forfeited. Specifically, Harmon pleaded guilty to wire fraud and obstruction of justice by unlawfully taking more than 712 bitcoin that had been seized by law enforcement and lapsed in the pending prosecution of Larry Harmon.

The pleading was delivered by US Attorney Matthew M. Graves, Darrell J. Waldon, Special Agent in Charge of the IRS-Criminal Investigation (IRS-CI), and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office’s Criminal, announced and cyber divisions.

The charge of wire fraud carries a maximum statutory sentence of up to 20 years in prison; The charge of obstruction of justice carries a maximum statutory penalty of 30 years imprisonment. Chief Justice of the US District Court Howell has scheduled a hearing on the verdict for March 17, 2023.

According to court documents, the defendant’s brother, Larry Harmon, was arrested in February 2020 for his operation of Helix, a dark web-based cryptocurrency money laundering service known as “Mixer” or “Tumbler.” As Harmon later admitted, Helix laundered over 350,000 Bitcoin — worth over $300 million — on behalf of clients, with most of the volume coming from the dark web markets. As part of the arrest, law enforcement seized various assets, including a cryptocurrency storage device containing Larry Harmon’s illegal earnings from operating Helix, which was forfeited in criminal proceedings. However, due to the device’s additional security features, law enforcement was initially unable to recover bitcoins stored on the device.

Knowing that the government was attempting to recover the bitcoins stored on the confiscated device for use in Larry Harmon’s criminal case, Gary Harmon used his brother’s credentials to recover the bitcoin wallets stored on the device and secretly recovered more than 712 worth of bitcoins of about $4.8 million into his own wallets at the time – he stole those funds and obstructed the pending criminal forfeiture process. Gary Harmon further laundered the proceeds through two online bitcoin mixing services before using the laundered bitcoins to fund large purchases and other expenses.

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

As part of his pleading today, Gary Harmon also agreed to the expiry of cryptocurrencies and other assets derived from the fraudulently taken 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 forfeitable properties exceeds $12 million.

– This matter has been investigated by the IRS-CI District of Columbia Cyber ​​Crime Unit and the Federal Bureau of Investigation.

In announcing the pleading, US Attorney Graves, IRS-CI Special Agent Waldon and FBI Special Agent Jacobs commended the work of those investigating the case by the IRS Criminal Investigation – Cyber ​​Crime Unit and the FBI’s Washington Field Office. The case is being prosecuted by Assistant US Attorney Christopher B. Brown and Trial Attorney C. Alden Pelker of the Department of Justice Computer Crime and Intellectual Property Section (CCIPS), with assistance from paralegal Michon Tart and former paralegal Chad Byron. Additional assistance was provided by Assistant US Attorneys Segev Phillips and Daniel Riedl of the Northern District of Ohio and CCIPS Trial Attorney S. Riane Harper.

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