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Today, Gary Harmon, age 31 of Cleveland, Ohio pleaded guilty for conspiring to pilfer cryptocurrency which was on the way to criminal forfeiture from his brother Larry’s seized assets. Larry was convicted of laundering and administrating Grams-Helix. Gary pleaded guilty to wire fraud and obstruction of justice after unlawfully taking more than 712 Bitcoin that had been captured by law enforcement and were set aside for forfeiture in the case against Larry.
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 Division, announced the plea.
In addition to the wire fraud charge, obstruction of justice carries a statutory maximum sentence of 20 years in prison. U.S. District Court Chief Judge Howell has scheduled a sentencing hearing for March 17, 2023.
Court documents report that in February 2020, Larry Harmon – the defendant’s brother – was apprehended for operating Helix; a money laundering service which blends cryptocurrency transactions and is sometimes referred to as a “mixer” or “tumbler.” As Harmon later confessed, over 300,000 bitcoin – valued at around $300 million at the time of the transactions – had been laundered on behalf of buyers from Darknet markets. Consequently, law enforcement seized assets related to this case including a crypto storage device containing Larry’s criminal earnings from Helix; which was subject to forfeiture. However, law enforcement were initially unable to access the bitcoin held on this device due to its extra security measures.
Realizing the government aimed to reclaim the bitcoin from the taken device for confiscation in Larry Harmon’s criminal case, Gary employed his brother’s particulars to regenerate the bitcoin wallets stored there and clandestinely move more than 712 bitcoin, estimated at roughly $4.8 million then, into his own wallets – plundering those monies and hampering the pending criminal forfeiture proceeding. He then further sanitized the proceeds through two online bitcoin mixer services before using them to effect large buys and other spending.
Larry Harmon pleaded guilty to money laundering conspiracy in August 2021.
As part of his plea today, Gary Harmon also agreed to forfeit cryptocurrency 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). A total value of $12 million has been reached for these forfeitable properties as a result of an increase in market prices.
The IRS-CI District of Columbia Cyber Crime Unit and the Federal Bureau of Investigation investigated this matter.
U.S. Attorney Graves, IRS-CI Special Agent in Charge Waldon, and FBI Special Agent in Charge Jacobs commended the investigative efforts of the IRS Criminal Investigation – Cyber Crime Unit and the FBI’s Washington Field Office for bringing about a plea. The prosecution team is headed by Assistant U.S. Attorney Christopher B. Brown and Trial Attorney C. Alden Pelker from the Department of Justice Computer Crime and Intellectual Property Section (CCIPS), supported by Paralegal Specialist Michon Tart, former Paralegal Specialist Chad Byron, Assistant U.S. Attorneys Segev Phillips and Daniel Riedl of the Northern District of Ohio, as well as CCIPS Trial Attorney S. Riane Harper.
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