In an ongoing criminal case, a man in Ohio is facing four years and three months in prison for stealing more than 712 bitcoins (BTC) that were subject to forfeiture.
According to the US Department of Justice, Gary Harmon, a 31-year-old man from Cleveland, allegedly stole 712 bitcoins that were the subject of pending criminal forfeiture proceedings in the case of his brother, Larry Harmon.
Gary Harmon pleaded guilty to criminal charges in January, per the Justice Department. He had been facing one count of wire fraud and one count of obstruction of justice, each with a maximum penalty of 40 years.
Harmon obtained the 712 bitcoins, then valued at $4.8 million, following his brother’s incarceration in February 2020.
Man arrested for running crypto mixer
Gary’s brother, Larry, was arrested for running Helix, a darknet-based crypto mixer that had laundered over 350,000 bitcoins worth an estimated $300 million at the time of the transactions.
Larry later pleaded guilty to money laundering and crimes related to unlawful money transmission. In addition to the criminal charges, Larry Harmon was fined $60 million by the Financial Crimes Enforcement Network (FinCEN), marking the first time a financial penalty was issued against a crypto mixer.
The Justice Department said that law enforcement had seized several assets, including a crypto storage device containing Larry Harmon’s bitcoin stash from Helix’s operations, which he forfeited in the criminal case.
However, due to the device’s additional security features, law enforcement officers were initially unable to recover the crypto stored on it.
Gary Harmon reportedly used his brother’s credentials to recreate the crypto wallets stored on the seized device and covertly transfer more than 712 bitcoins to his wallet.
He then laundered the funds using two online crypto mixers before using the proceeds to make purchases and settle expenses.
The Department of Justice said that as part of his prosecution, Gary Harmon agreed to surrender more than 647.41 BTC, 2.14 Ethereum (ETH), and 17,404,400.64 Dogecoin (DOGE), all currently valued at about $21 million, that he had obtained from the fraudulent act.