Law Enforcement's Operation Revealed: Uncovering Multi-Million Dollar Bitcoin Trails in the Harmon Brothers' Illegal Cases
In a groundbreaking move, the Internal Revenue Service Criminal Investigation (IRS-CI) seized a record $7 billion worth of digital assets in 2022, according to a recent report. This seizure is the largest ever by the IRS-CI and marks a significant milestone in the fight against cryptocurrency-related crimes.
The organization responsible for the seizure remains unnamed in the provided search results. However, the IRS-CI has been active in recovering funds from various sources, including the theft of Bitcoin from darknet market Silk Road, where they recovered $3.36 billion, and from two individuals accused of laundering funds stolen from the 2016 Bitfinex hack, where they recovered $3.6 billion.
The investigation leading to the record seizure has also led to the arrest and charging of two brothers, Larry Dean Harmon and Gary James Harmon. Larry, the older brother, was charged in February 2020 and pled guilty in 2021 to money laundering conspiracy. He was ordered to pay a $60 million civil penalty by the Financial Crimes Enforcement Network (FinCEN), the first of its kind for Bitcoin mixing activities.
Gary, Larry's younger brother, was employed at Coin Ninja and founded DropBit, the company's mobile Bitcoin wallet. However, his role in the cryptocurrency world took a darker turn when he was arrested in July 2021. It was alleged that Gary used Larry's passwords to access several of Larry's Bitcoin wallets in custody, transferring 712 Bitcoin (worth more than $5 million at the time) to eight new wallets after Larry's arrest in 2020.
Larry's business, Helix, was a Bitcoin mixer, often used to hide proceeds from drug trafficking and other activities on the dark web. Between 2014 and 2017, Helix processed more than 350,000 Bitcoin (worth approximately $300 million at the time) on behalf of users. Law enforcement used a website to identify 16 Bitcoin wallets which contained nearly 5,000 Bitcoin worth of proceeds from Helix's operation.
In the early stages of the investigation, an undercover FBI agent transferred Bitcoin from an AlphaBay wallet to Helix, confirming that using the mixer reduced direct traceability to AlphaBay. Larry regularly promoted Helix to darknet market users and partnered with AlphaBay, Evolution, Agora Market, Nucleus, Dream Market, and other darknet markets to grow Helix's customer base.
Gary was ordered to surrender $20 million in virtual currencies and other property. He pled guilty to wire fraud and obstruction of justice and received a four-year prison sentence. The "2023 Crypto Crime Report" is available now, providing further insights into the world of cryptocurrency crimes and the ongoing efforts to combat them.
