Gary James Harmon of Ohio was sentenced to four years and three months in prison for stealing 712 Bitcoin that belonged to his brother, the U.S. Department of Justice has announced.
Harmon pleaded guilty to criminal charges in January, faced with one count each of wire fraud and obstruction of justice, carrying a maximum sentence of 40 years combined.
The 712 Bitcoin in question—worth over $21 million at today’s prices—was taken by Harmon after the arrest of his brother in February 2020. According to the Justice Department, the funds were worth around $4.8 million at the time they were taken.
Harmon’s brother, Larry Dean Harmon, was arrested in February 2020 for operating a coin-mixing service called Helix, which processed over 350,000 Bitcoin between 2014 and 2017 and partnered with several darknet markets, the Justice Department said.
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Larry Dean Harmon later pleaded guilty to a money laundering conspiracy and charges associated with the improper transmission of money in 2021. In addition to criminal charges, Larry Dean Harmon was hit with a $60 million penalty by The Financial Crimes Enforcement Network (FinCEN), the first penalty levied again a Bitcoin mixer.
As part of that prosecution, law enforcement seized several assets, including a “cryptocurrency storage device” that couldn’t be accessed initially due to certain security features, the Justice Department said.
Gary James Harmon was able to “covertly” send himself 712 Bitcoins on the device by recreating Bitcoin wallets with his brother's credentials. Harmon then laundered the assets further, sending the freshly-taken bitcoin to two other online mixing services, authorities said.
When he agreed to hand over assets that stemmed from the 712 Bitcoin he took illegally, he agreed to forfeit cryptocurrencies that included 17.4 million Dogecoin, around 647 Bitcoin, and just over 2 Ethereum—altogether valued in excess of $20 million by the Justice Department.
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Though advocates of coin mixers have called them necessary tools for maintaining the privacy of crypto transactions, government officials have taken aim at the services, deriding them as crucial to hackers and other bad actors.
Coin mixers obfuscate the source and destination of funds by grouping various transactions together. And last summer, the U.S. Treasury Department announced sanctions against the coin mixer Tornado Cash, essentially banning people in the U.S. from engaging with the application.
The Treasury Department said Tornado Cash was being used by the North Korean state-sponsored hacking organization, Lazarus Group. The move drew condemnation from politicians like Rep. Tom Emmer and the whistleblower Edward Snowden, who called it a “do or die” moment for crypto.
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A federally sanctioned “coin mixer” used by criminals to launder money appears to have been relaunched under a different name, according to a blockchain analytics firm. "Blender is back," crypto researchers Elliptic said on Monday, explaining that the app that was sanctioned last year by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) had “highly likely” been re-launched as Sinbad. Coin mixers are platforms that allow people to anonymously send and receive cryptocurrencies...
The crypto policy non-profit Coin Center is currently suing the Treasury Department, accusing it of government overreach in blacklisting the tool. And though his trial is pending, a Dutch court recently ruled that a Tornado Cash developer named Alexey Pertsev could be released on bail after spending nine months in detention.
Pertsev noted his freedom on Twitter on Friday, wondering what had gone on in the crypto space since he was arrested last August.
Sorry I was afk for a while, what did I miss? 👀
— Alexey Pertsev (@alex_pertsev) April 28, 2023
