An Ohio man was handed a jail sentence of four years and three months for stealing over 712 Bitcoin that belonged to his brother, a convicted money launderer and proprietor, according to the Department of Justice.
Gary James Harmon, 31, of Cleveland, was given the sentence after he pleaded guilty in January to wire fraud and obstruction of justice for illegally taking the Bitcoin, which had earlier been seized by law enforcement and was subject to forfeiture in the pending criminal prosecution of his brother, Larry Harmon, the Justice Department said.
Larry was arrested in February 2020 after being caught “for his operation of Helix, a darknet-based cryptocurrency money laundering service,” according to Decrypt.
On behalf of his customers, Larry was able to launder more than 350,000 Bitcoin — worth more than $300 million when the transactions took place — through the coin-mixing service known as “mixer” or “tumbler.”
“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,” the Justice Department said. “However, law enforcement was initially unable to recover bitcoin stored on the device due to the device’s additional security features.”
Gary, who was aware that the government was trying to recover the Bitcoin from the device seized for forfeiture, used his brother’s credentials to recreate the Bitcoin wallets stored on the device. Consequently, Harry was able to steal the funds and obstruct pending criminal forfeiture proceedings in Larry’s criminal case.
Gary secretly transferred more than 712 Bitcoin, valued at approximately $4.8 million at the time, to his own wallets.
“Gary Harmon further laundered the proceeds through two online bitcoin mixer services before using the laundered bitcoins to finance large purchases and other expenditures,” the Department of Justice continued. “Gary Harmon 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).”
The increased market price for these forfeitable properties is now valued at more than $20 million.
Gary pleaded guilty in January to charges that included one count each of wire fraud and obstruction of justice.
Larry had also pleaded guilty to money laundering conspiracy in his case in August 2021.
