Ohio Man Sentenced to Prison for Stealing $21m in Bitcoin
An Ohio man has been sentenced to four years and three months behind bars after stealing 712 bitcoin ($21m), which were seized by investigators following the arrest of his brother.
Gary James Harmon, 31, of Cleveland, stole the cryptocurrency, which was the subject of “pending criminal forfeiture proceedings” in the case of his sibling, Larry Dean Harmon, according to the Department of Justice (DoJ).
Dark Web Mixer Operator Arrested
Larry Harmon was arrested in February 2020 for operating a dark web cryptocurrency mixer known as Helix. It was used to launder over 350,000 bitcoin, valued at the time of the transactions at over $300m, but which are now worth $10.3bn. The funds came from customers operating on dark web markets, according to the DoJ.
During Harmon’s arrest, law enforcers seized a cryptocurrency storage device containing funds generated by Helix, which were subject to forfeiture, meaning they were confiscated by the state.
Brother Steals Seized Bitcoin
However, investigators were unable to recover the bitcoin stored on the device due to built-in security features.
Gary Harmon used his brother’s logins to recreate and access the wallets stored on the device, transferring over 712 bitcoin to his own wallet. The digital currency was worth $4.8m at the time but is worth many times more today.
Gary Harmon then laundered these funds though two online bitcoin mixers before using the digital currency to finance some large purchases, according to the DoJ.
Forfeiture and Guilty Plea
Following his arrest, he subsequently agreed to forfeit to the state the crypto he stole, including over 647 bitcoin, 2 Ethereum and 17.4 million Dogecoin, which have a combined value in excess of $20m.
Larry Harmon pleaded guilty to money laundering conspiracy in his case, in August 2021.
Cryptocurrency Mixers and Criminal Activity
Cryptocurrency mixers are an increasingly popular way for criminals to launder the proceeds of their crimes.
The US government is scrambling to catch up. In May 2022 it sanctioned one of the most popular mixers, Blender.io, which had been used by North Korean threat actors.
However, there are numerous alternatives for clued-up cyber-criminals to use.