In a shocking turn of events, Ohio resident Gary James Harmon has been sentenced to four years and three months in prison for stealing 712 Bitcoins, currently valued at over $21 million, from his brother Larry Dean Harmon. Larry himself has faced legal repercussions due to his involvement in Helix, a coin-mixing service.
Plea Bargain and Potential Punishment
Gary Harmon admitted guilt to one count of wire fraud and one count of obstruction of justice in January. If convicted for both charges, he could have faced up to 40 years in prison. Gary stole the Bitcoins, then worth roughly $4.8 million, following Larry’s arrest in February 2020.
Behind the Scenes of Larry’s Criminal Enterprise
Authorities apprehended Larry Dean Harmon for operating Helix, which processed more than 350,000 Bitcoins between 2014 and 2017. The U.S. Department of Justice linked this coin-mixing service to multiple darknet markets. In 2021, Larry pleaded guilty to money laundering conspiracy and improper money transmission charges. The Financial Crimes Enforcement Network (FinCEN) imposed a historic $60 million penalty on him – the first-ever against a Bitcoin mixer.
Gary’s Cunning Laundering Scheme and Asset Seizure
During Larry’s prosecution, law enforcement officials seized various assets, including a cryptocurrency storage device with robust security features. Gary covertly sent himself 712 Bitcoins using this device, recreating Bitcoin wallets with his brother’s credentials. Authorities found that he laundered the stolen assets by transferring them to two other online mixing services.
A Massive Forfeiture of Ill-Gotten Gains
As part of his plea deal, Gary agreed to forfeit the cryptocurrencies associated with the stolen Bitcoins. The Justice Department valued the seized assets – 17.4 million Dogecoin, around 647 Bitcoin, and just over 2 Ethereum – at over $20 million.
The Debate Over Coin Mixers and Government Intervention
Although some view coin mixers as vital for maintaining privacy in crypto transactions, government officials target these services as a key resource for hackers and other malicious actors. Coin mixers function by obfuscating the origin and destination of funds through transaction grouping.
The U.S. Treasury Department imposed sanctions on coin mixer Tornado Cash last summer, accusing the North Korean state-sponsored hacking group Lazarus of using the service. This decision has faced criticism from figures like Rep. Tom Emmer and whistleblower Edward Snowden.
Coin Center, a crypto policy non-profit, is currently suing the Treasury Department for overreach in blacklisting Tornado Cash. Recently, a Dutch court granted Tornado Cash developer Alexey Pertsev bail after nine months in detention, with his trial still pending.