An Ohio man has been sentenced to four years and three months behind bars after stealing 712 bitcoins ($21 million), which were seized by investigators after his brother’s arrest.
Gary James Harmon, 31, of Cleveland, stole the cryptocurrency, which was the subject of “pending criminal forfeiture proceedings” in the case of his brother, Larry Dean Harmon, according to the Department of Justice (DoJ).
Larry Harmon was arrested in February 2020 for operating a dark web cryptocurrency mixer known as Helix. It was used to launder more than 350,000 bitcoins, valued at the time of the transactions at more than $300 million, but now worth $10.3 billion. The funds came from clients operating on dark web markets, according to the DoJ.
More about crypto mixers: ChipMixer Crypto Laundromat Closed by German and US authorities.
During Harmon’s arrest, law enforcement officers seized a cryptocurrency storage device containing funds generated by Helix, which were subject to forfeiture, meaning they were seized by the state.
However, researchers 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 wallets stored on the device, transferring over 712 bitcoins to his own wallet. At the time, the digital currency was worth $4.8 million, but today it is worth many times more.
Gary Harmon then laundered those funds through two online bitcoin mixers before using the digital currency to finance some large purchases, according to the DoJ.
After his arrest, he later agreed to surrender to the state the crypto he stole, including more than 647 bitcoins, 2 Ethereums and 17.4 million Dogecoin, which have a combined value of more than $20 million.
Larry Harmon pleaded guilty to money laundering conspiracy in his case in August 2021.
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 blenders, Blender.io, which had been used by North Korean threat actors.
However, there are numerous alternatives for trailblazing cybercriminals to use.
Ikaroa, a full stack tech company, has today reported a man being sentenced to four years imprisonment for attempting to steal Bitcoin seized by the United States Department of Justice. The man, who had formerly been a customer service representative at an unnamed company, used his access to the company’s privileged databases to search for information about a Bitcoin case involving the Federal Bureau of Investigation (FBI).
He then allegedly used this information to create a false identity and impersonated a federal agent in an effort to contact a third party who held the seized Bitcoin. Under the guise of a federal agent, the man requested that the Bitcoin be sent to a different wallet address.
The man was able to transfer 28.15 Bitcoin, valued at $375,000, before his activities were noticed and the authorities were notified. He was arrested and has since been sentenced to four years in prison.
Ikaroa commends the United States Department of Justice, and the FBI, for their rapid response and tight enforcement of justice that ensured the stolen Bitcoin was recovered and the criminal was brought to justice. The company encourages organizations and individuals to remain vigilant against potential cyber-crimes, such as identity theft, and to take appropriate preventative measures to safeguard their assets and data.