Man Pleads Guilty to Stealing Bitcoin ‘Seized’ by US Government
Publikováno: 9.1.2023
An Ohio man has pleaded guilty to stealing over 712 bitcoin that was “seized” by the U.S. government in another criminal case. He has agreed to forfeit some bitcoin, ether, and dogecoin as part of his plea. “Due to the increase in market prices, the total value of these forfeitable properties exceeds $12 million,” said […]
An Ohio man has pleaded guilty to stealing over 712 bitcoin that was “seized” by the U.S. government in another criminal case. He has agreed to forfeit some bitcoin, ether, and dogecoin as part of his plea. “Due to the increase in market prices, the total value of these forfeitable properties exceeds $12 million,” said the U.S. Department of Justice (DOJ).
US Man Steals Brother’s ‘Seized’ Bitcoin
The U.S. Department of Justice (DOJ) announced Friday that a 31-year-old Ohio man, Gary James Harmon, has pleaded guilty to “unlawfully stealing” bitcoin that was “seized” by the federal government in his brother’s pending criminal case. The DOJ described:
Harmon pleaded guilty to wire fraud and obstruction of justice for unlawfully taking more than 712 bitcoin that had been seized by law enforcement and was subject to forfeiture in the pending criminal prosecution of Larry Harmon.
As part of his plea, Gary Harmon agreed to forfeit “cryptocurrencies 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),” the DOJ added. “Due to the increase in market prices, the total value of these forfeitable properties exceeds $12 million.”
The Stolen ‘Seized’ Bitcoin
The stolen bitcoin was stored in a Trezor hardware wallet that was seized by the federal government in connection with Larry Harmon, who was arrested in February 2020. The device was stored in an Internal Revenue Service (IRS) evidence locker. The federal authorities had not taken control of the coins due to the device’s complex security, the DOJ explained.
Larry Harmon pleaded guilty in August 2021 to money laundering conspiracy in connection with “his operation of Helix, a darknet-based cryptocurrency money laundering service, known as a ‘mixer’ or ‘tumbler,'” the DOJ detailed, noting:
As Harmon later admitted, Helix laundered over 350,000 bitcoin — valued at over $300 million at the time of the transactions — on behalf of customers, with the largest volume coming from darknet markets.
As part of his arrest, law enforcement seized various assets, including a hardware wallet containing the illegal proceeds generated through his Helix operation.
However, while the government was still trying to gain access to the seized bitcoin, Gary Harmon used his brother’s credentials to transfer more than 712 BTC, valued at approximately $4.8 million at the time, from his brother’s seized device to his own bitcoin wallets in April 2020. He then laundered the proceeds through two online mixers before using them to finance his own expenditures, the DOJ described.
The Justice Department noted that regarding the Gary Harmon case:
The wire fraud charge carries a statutory maximum sentence of up to 20 years in prison; the obstruction of justice charge carries a statutory maximum sentence of 20 years in prison.
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