Ohio Man Pleads Guilty for Unlawfully Stealing Over 712 Seized Bitcoin Subject to Forfeiture in Brother’s Pending Criminal Case | USAO-DC

Ohio Man Pleads Guilty for Unlawfully Stealing Over 712 Seized Bitcoin Subject to Forfeiture in Brother’s Pending Criminal Case | USAO-DC

  • Bitcoin
  • January 6, 2023
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Defendant’s Brother Convicted of Running the Money Laundering Service Helix

            WASHINGTON – Gary James Harmon, 31, of Cleveland, Ohio, pleaded guilty today to perpetrating a scheme to steal cryptocurrency that was pending criminal forfeiture from Harmon’s brother, now-convicted money launderer and proprietor of Grams-Helix, Larry Dean Harmon.  Specifically, Harmon pleaded guilty to wire fraud and obstruction of justice for unlawfully taking more than 712 bitcoin that had been seized by law enforcement and was subject to forfeiture in the pending criminal prosecution of Larry Harmon.

            The plea was announced by United States Attorney Matthew M. Graves, Darrell J. Waldon, Special Agent in Charge of IRS-Criminal Investigation (IRS-CI), and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office’s Criminal and Cyber Divisions.

            The wire fraud charge carries a statutory maximum sentence of up to 20 years in prison; the obstruction of justice charge carries a statutory maximum sentence of 20 years in prison.  U.S. District Court Chief Judge Howell scheduled a sentencing hearing for March 17, 2023. 

            According to court documents, in February 2020, the defendant’s brother, Larry Harmon, was arrested for his operation of Helix, a darknet-based cryptocurrency money laundering service, known as a “mixer” or “tumbler.” As Harmon later admitted, Helix laundered over 350,000 bitcoin – valued at over $300 million at the time of the transactions – on behalf of customers, with the largest volume coming from Darknet markets.  As part of the arrest, law enforcement seized various assets, including a cryptocurrency storage device containing Larry Harmon’s illegal proceeds generated through the operation of Helix, which were subject to forfeiture in the criminal case.  However, law enforcement was initially unable to recover bitcoin stored on the device due to the device’s additional security features. 

            Knowing that the government was 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 bitcoin, valued at approximately $4.8 million at the time, to his own wallets – stealing those funds and obstructing the pending criminal forfeiture proceeding.  Gary Harmon further laundered the proceeds through two online bitcoin mixer services before using the laundered bitcoins to finance large purchases and other expenditures. 

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

            As part of his plea today, Gary Harmon also agreed to the forfeiture of cryptocurrencies and other properties 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 was investigated by the IRS-CI District of Columbia Cyber Crime Unit and the Federal Bureau of Investigation. 

            In announcing the plea, U.S. Attorney Graves, IRS-CI Special Agent in Charge Waldon, and FBI Special Agent in Charge Jacobs commended the work of those who investigated the case from the IRS Criminal Investigation – Cyber Crime Unit and the FBI’s Washington Field Office.  The case is being prosecuted by Assistant U.S. 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 Specialist Michon Tart and former Paralegal Specialist Chad Byron.  Additional assistance has been provided by Assistant U.S. Attorneys Segev Phillips and Daniel Riedl of the Northern District of Ohio and CCIPS Trial Attorney S. Riane Harper.   

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