Legal Issues

OH Man Sentenced to 51 Months In Prison For Bitcoin Theft

OH Man Sentenced to 51 Months In Prison For Bitcoin Theft

A Cleveland, Ohio man has been sentenced to 51 months in federal prison for a bitcoin theft scheme. 

According to an official release from the IRS, Gary James Harmon was the leader of a plan to steal cryptocurrency that was already the subject of pending criminal forfeiture proceedings. The bitcoin in question was part of a case against Larry Dean Harmon, Gary's brother.

Larry was arrested in February 2020 for operating the dark web-based Helix service. This online money laundering operation was a “mixer” or “tumbler" -- these services mix potentially illicit cryptocurrency funds with "good" currency, with the intention of masking the original source.

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Credit: Getty Images

At the time, Helix laundered approximately 350,000 bitcoin with a value of over $300 million Law enforcement seized a variety of paraphernalia, such as a cryptocurrency storage device from Larry Harmon’s residence.

The device, however, was unable to be immediately accessed due to it's security features.

This is what led to Gary's part in the crime. Armed with the knowledge that authorities wanted to seize the illegally-obtained bitcoin stored on his brother's storage device, Gary used Larry's credentials to reestablish the bitcoin wallets that were stored on the device.

He ultimately transferred more than 712 bitcoin, valued at abut $4.8 million at the time, to wallets he set up under his own name. This effectively prevented law enforcement from seizing the funds. Additionally, Gary laundered the funds through two more tumblers prior to making big-ticket purchases with the money.

The IRS confirmed that Gary will face three years of supervised release following his prison term. He was also ordered to forfeit 647.41 bitcoin (BTC), 2.14 ethereum (ETH), and 17,404,400.64 dogecoin (DOGE). The value of these crypto funds now exceeds $12 million.

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Credit: Getty Images

The case was investigated by IRS-Criminal Investigation District of Columbia Cyber Crime Unit and the FBI.

U.S. District Court Judge Beryl A. Howell handed down Gary's sentence. Larry pleaded guilty to his crimes in August 2021.  

What do you think about this cryptocurrency theft scheme?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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