Ohio Resident Appeals Guilty To Operating Darknet-Based Bitcoin ‘Mixer’ That Fraudedover $300 Million

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Helix, a Darknet-based cryptocurrency laundering service, was operated by an Ohio man who pleaded guilty towards a money laundering intrigue today. Larry Dean Harmon, 38, of Akron, admitted to operating Helix between 2014 and 2017, according to court documents.Helix was a bitcoin”tumbler” or “mixer,” letting customers to send bitcoin to chosen recipients in a way that concealed the source or owner of the bitcoin in exchange for a fee. Helix was linked to and associated with “Grams,” Harmon’s Darknet search engine. To keep transactions hidden from law enforcement, Harmon advertised Helix to customers on the Darknet.

The Justice Department’s Criminal Division Assistant Attorney General Kenneth A. Polite Jr. said, “By holding Harmon accountable, the department has disrupted the unlawful money laundering practises of these dangerous criminal enterprises.”“The Justice Department will continue to take enforcement actions, in collaboration with our law enforcement and regulatory partners, to identify and impede those who use illegal means for financial gain, as well as those who use the Darknet to facilitate and obscure their criminal conduct.”

Acting United States Attorney Channing D. Phillips for the District of Columbia said, “Darknet markets and the dealers who sell opioids and other illegal drugs on them are a growing scourge.” “They may use technologies like Helix to conceal their identities and launder millions of dollars in sales.However, the department and its law enforcement partners will expose their activities, dismantle the infrastructure that these criminal marketplaces rely on, and prosecute and convict those who are responsible.”

“Criminals may believe that by using services like Helix to hide the source of illicit funds, they can mask financial transactions,” said Assistant Director Calvin A.Shivers from the Criminal Investigative Division of the FBI. “Every day, the FBI and our state, local, federal, and international law enforcement partners collaborate for protecting the American people from urbane money launderers and financiers in a complex and ever-changing digital environment.”

“The criminal marketplaces that peddle their nefarious goods and services drive the Darknet,” said IRS Criminal Investigation Chief James C. Lee. “However, the infrastructure that supports these marketplaces is a big reason for their success. Harmon made money by facilitating back-channel support for these marketplaces and assisting criminals in laundering money obtained through illegal activities. The funds were then hidden from the government. He acknowledged his role in these activities today and will now be held responsible.”

The FBI’s Washington Field Office Assistant Director in Charge Steven M. D’Antuono said, “Harmon confessed that he plotted with Darknetpurveyors to launder bitcoinproducedvia drug trafficking as well asfurther illegal activities.” “Today’s guilty plea demonstrates the FBI’s dedication to infiltrating and shutting down cryptocurrency money-laundering networks that support cyber-criminal enterprises.”

Helix partnered with a number of Darknet markets, comprisingEvolution, AlphaBay, Cloud 9, and others, to offerbitcoin money laundering services to the market customers, according to Harmon. Helix progressed over 350,000 bitcoin on behalf of customers, appreciated at over $300 million at the time of the dealings, with the majority of the volume coming from Darknet markets.Harmon also admitted that he conspired with Darknet vendors and marketplace administrators to use those Darknet marketplaces to launder bitcoins obtained through illegal drug trafficking.

Harmon also agreed to the forfeiture of more than 4,400 bitcoin, worth more than $200 million at today’s prices, and other seized properties related to the money laundering conspiracy as part of his plea deal.Harmon faces a maximum sentence of 20 years in prison, a fine of $500,000 or twice the worth of the property tangled in the transaction, a term of administered release of not more than three years, and obligatory restitution at a later date.Harmon’s guilty plea was accepted by Chief Judge Beryl Howell of the United States District Court for the District of Columbia, who will determine any sentence after considering the US Sentencing Guidelines and other statutory factors.

The case was investigated by the IRS-CI Cyber Crimes section and the Washington Field Officeof FBI, with help from the Criminal Division’s Office of International Affairs, the US Attorney’s Office for the Northern District of Ohio, the IRS’s Cincinnati, Washington, and Oakland Field Offices, the Criminal Investigative Divisionof FBI, and the Cleveland, Newark, and San Francisco Field Offices.

The investigation was supported by the Belize Ministry of the Attorney General and the Belize National Police Department, which were coordinated through the US Embassy in Belmopan. The investigation was co-ordinated with the Financial Crimes Enforcement Network, which imposed a civil monetary penalty of $60 million against Harmon in a separate action.

The case was prosecuted by Trial Attorneys S. Riane Harper and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), as well as Assistant United States Attorney Christopher B. Brown of the United States Attorney’s Office for the District of Columbia.Trial Attorneys Emily Siedell and Brian Nicholson of the Criminal Division’s Office of International Affairs, former CCIPS Trial Attorney W. Joss Nichols, and Assistant United States Attorney Daniel Riedl of the Northern District of Ohio provided additional assistance.

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