Bitcoin thief who stole $5M worth of crypto sentenced to 4 years in prison

[sokani]

An Ohio man was sentenced today to four years and three months in prison for stealing over 712 bitcoin that were the proceeds of the darknet bitcoin mixer Helix and subject to forfeiture in a then-pending criminal case.

According to court documents, Gary James Harmon, 31, of Cleveland, perpetrated a scheme to steal cryptocurrency that was the subject of pending criminal forfeiture proceedings in the case of Larry Dean Harmon, Gary Harmon’s brother. In February 2020, Larry Harmon was arrested for his operation of Helix, a darknet-based cryptocurrency money laundering service, known as a “mixer” or “tumbler.” 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. Law enforcement seized various assets, including a cryptocurrency storage device containing Larry Harmon’s illegal proceeds generated through the operation of Helix, which were subject to forfeiture in the criminal case. However, law enforcement was initially unable to recover bitcoin stored on the device due to the device’s additional security features.

Knowing that the government was seeking to recover the bitcoin stored on the seized device for forfeiture in Larry Harmon’s criminal case, Gary Harmon used his brother’s credentials to recreate the bitcoin wallets stored on the device and covertly transfer more than 712 bitcoin, valued at approximately $4.8 million at the time, to his own wallets – stealing those funds and obstructing the pending criminal forfeiture proceeding. Gary Harmon further laundered the proceeds through two online bitcoin mixer services before using the laundered bitcoins to finance large purchases and other expenditures.

Gary Harmon agreed to the forfeiture of 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). Due to the increase in market prices, the total value of these forfeitable properties exceeds $20 million.

Source 1
Source 2
This is the latest sentencing of a Bitcoin thief coming from the US. After he successfully recreated the wallet containing his brother's Bitcoin proceeds from Helix and laundered it through two online mixers service, I believe he wouldn't have been caught If not for his lifestyle and expensive property purchases that attracted the attention of government agencies.

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[Upgrade00]

A dollar thief is just as ridiculous a phrase as Bitcoin thief is. Articles and blogs make these loose associations to make their topic title catchy and maybe attract a bit of the cryptocurrency audience.

If could also be a ploy by the government to associate Bitcoin as much as possible to scams which should dissuade people from using it if they were considering it. Whichever it is, we should not promote their low impact financial policies targeted against bitcoin and their role in finance freedom.

[DaveF]

If you are going to do something like this you really can't go out and start spending all that money and showing off.
Go out to nicer restaurants, fine. Drop $25000 in a club, not fine.
Get the fully loaded Honda Accord instead of a low end one, fine. Get a 7 series BMW, not fine.
Take a vacation and fly business class instead of coach and stay in a slightly nicer hotel fine. Charter a jet and rent a private villa for 3 weeks, not fine.

And so on.

It's not like he was not being watched because of his brother.

You can't fix stupid....

-Dave

[Zaguru12]

First of all your topic tittle and that of a media outlet seems the same both seems more like clickbait because the phrase “bitcoin thief” is wrong because there are two other cryptocurrencies you mentioned in the article but the tittle only portrays bitcoin.

The other thing is how the scammer gets his on hands on the bitcoin if at all it was save on cold storage it might be hard but just like they warn on the forum. The criminal should be prosecuted but clearly putting up bitcoin and mixers up there only creates FUD and that is what the government and this news outlets wants

[sokani]

First of all your topic tittle and that of a media outlet seems the same both seems more like clickbait because the phrase “bitcoin thief” is wrong because there are two other cryptocurrencies you mentioned in the article but the tittle only portrays bitcoin.

Kind of seems that way to me since other cryptocurrencies were also found in the hardware. The fact that the Bitcoin constitutes highest amount of his brother's proceeds is not enough reason for him to be tag a Bitcoin thief.

The other thing is how the scammer gets his on hands on the bitcoin if at all it was save on cold storage it might be hard but just like they warn on the forum.

IRS had the hardware wallet in their possession but they couldn't access the cryptocurrencies because of some security features. I think he used a software to recreate the wallet and transferred the assets to his own personal wallet.

[sunsilk]

That's how you get all the eyes on you if you live lavishly suddenly and people will actually notice it with how you're spending that money.

While there's always the main catch from these articles highlighting only bitcoin but they should have used "crypto" instead of just bitcoin. Anyway, this is where it's all happening that people sees the bad side of bitcoin or crypto is due to these reports.

However, it's not just on these situations that do happen but even with fiat when there goes the thieves being arrested but don't get much attention as it's like a typical day for them.

[ChiBitCTy]

I am glad to see this, as bitcoin related crimes have been a bit hard to prosecute.  This is something that we are dealing with quite a bit in the collectibles section.  We've had quite a few "rug pulls" where coin/wallet makers have ended up keeping private keys for these fancy paper wallets that we collect, and trying to go after them has been quite the task.  Hopefully more and more arrest like this will help set the framework for legal litigation moving forward.

[coupable]

The difference between the number of stolen bitcoins and the bitcoins confiscated is 65 bitcoins. I mean, Mr. Harmon exploited 65 bitcoins, which covers much more than the assets and properties that were confiscated with bitcoins. I can't believe that after 4 years he will spend in prison, he will come out to find himself penniless.
Although Harmon agreed to confiscate all the assets he acquired fraudulently, the 4 years in prison as a sentence seems very light compared to the amount that was stolen. I do not know if this is considered a procedural defect or if it is a preliminary ruling pending further investigations. Or maybe it is because of the absence of legislation that exposes thefts in the crypto space.

[mejarm]

The term "dollar thief" is equally absurd as "bitcoin thief." These arbitrary connections are made by articles and blogs to make their topic titles appealing and perhaps draw in some bitcoin audience members. It may also be a government ruse to link Bitcoin as much as possible to fraud in an effort to discourage potential users from adopting it. Regardless, we shouldn't support their low-impact financial policies that target bitcoin and its role in promoting financial freedom.

[Zlantann]

This is the latest sentencing of a Bitcoin thief coming from the US. After he successfully recreated the wallet containing his brother's Bitcoin proceeds from Helix and laundered it through two online mixers service, I believe he wouldn't have been caught If not for his lifestyle and expensive property purchases that attracted the attention of government agencies.

Every criminal deserves punishment, therefore Gary James Harmon deserves the sentence. But the stealing shows how backward the government is in the aspect of crypto security. They didn't protect the ceased crypto funds which was why the Harmon brother could access the funds. The young man decided to nail his coffin when he went on an uncontrollable spending spree which attracted law enforcement agencies. When people are held responsible for the crime they commit it discourages others from engaging in such crimes and it also helps to reduce the pains the victims of such crimes go through. Hopefully, people that are victims of FTX criminal activities will get justice when those responsible for the fraud will be sent to prison.

[sheenshane]

I am glad to see this, as bitcoin related crimes have been a bit hard to prosecute.  This is something that we are dealing with quite a bit in the collectibles section.  We've had quite a few "rug pulls" where coin/wallet makers have ended up keeping private keys for these fancy paper wallets that we collect, and trying to go after them has been quite the task.  Hopefully more and more arrest like this will help set the framework for legal litigation moving forward.

I hope so IMO.
It's a reminder that even in the relatively unregulated world of crypto, theft is still a serious crime that can have severe consequences.
While the decentralized nature of Bitcoin may make it more difficult to track down and prosecute criminals because of abusing mixing services, law enforcement agencies are increasingly taking action to protect who is the victim of thieves and hold those who engage in illegal activities accountable.

Hopefully, this sentencing sends a message to would-be thieves that cryptocurrency theft isn't a victimless crime and that the risks outweigh the potential rewards.  But four years imprisonment seems not enough for me, the money should return to the owner too.

[acroman08]

this reminds me of James Zhong(a guy who stole $3.4B worth of Bitcoin), both of them alerted the government because of their stupidity they could have away with it(though I'm glad they got caught) if they had just been a bit smarter with their decisions. what I am surprised at is that James Zhong only got 1 year in prison for stealing $3.4B worth of Bitcoin and this guy got 4 years in prison for stealing $worth of crypto, but then again stealing the cryptocurrency was not his only crime.

[Captain Corporate]

It doesn't really feel like a "stealing" scenario though? I mean it was one guys money that government wanted to take, and his brother took it instead, I am not sure if that is considered stealing. Sure the law would say if the government wants it, then government gets it, that's understandable but stealing makes it sound like he go out and stole money from someone, its more like obstruction of justice maybe? That is a bit more like it, government tried to take it, and the brother prevented that, so its obstruction of justice, there is nobody stealing from anyone in this case so it should not be considered as stealing without a doubt. This is more like 200 hours community work type of deal more than jail time, after all he gave it all up too, so it shouldn't really be that weird.

[JoyMarsha]

That's how you get all the eyes on you if you live lavishly suddenly and people will actually notice it with how you're spending that money.

Money does have kind of dumb impulses that make individuals feel like spending more than they intended to (to brag about), even when they didn't work hard for it or anticipate having a million dollars in their bank account. Only a small percentage of people on this planet have mastered the art of self-control when faced with financial opportunities they never imagined in their entire lives.

When presented with enormous sums of money, a big number of the human population display a lavish lifestyle. Many that found financial freedom will continue to brag needlessly without realizing that they are attracting spies to observe their source of money, which led them to spend extravagantly in the first place.

[CryptSafe]

This is the latest sentencing of a Bitcoin thief coming from the US. After he successfully recreated the wallet containing his brother's Bitcoin proceeds from Helix and laundered it through two online mixers service, I believe he wouldn't have been caught If not for his lifestyle and expensive property purchases that attracted the attention of government agencies.

The young man decided to nail his coffin when he went on an uncontrollable spending spree which attracted law enforcement agencies.

This is how they are caught. After stealing, they find it difficult to hide themselves more especially when  the amount of money stolen is big enough to sustain them and their family but unbeknownst to them that they succeeded in attracting the federal agencies to themselves as a result of their reckless spending spree. Similar scenario to Sam Bankman-Fried but his case was that of a coordinated act with his exchange and even worse than this scenario.

[rodskee]

5 Million dollars worth of crypto but only facing 4 years of sentence? is this really enough for that huge amount he had taken ?
not sure if I am too exaggerated but I think this is a lifetime sentence because there are many thief there that will risk their 4 years for this amount to live a luxurious life before being caught or after the imprisonment .

_________________________________________

But it is good that we are seeing something in process to take those abusers of crypto in Jail , and with this there is a true justice in a market that they called anonymous and hard to  be bring to justice .

[SamReomo]

The lesson we can learn from the guy is never ever try to recover the money that your brother earned through a fraudulent activity. And even if you do so then don't spend the money like a king because your final destination will be waiting for you and that's the bars behind which you will be trapped. His own lavish style and spending habits made him the target of the agencies, if he was wise enough then he would never spend the money slowly over time. But still crime has an end and no matter how intelligent a criminal is his final destination is behind the bars.

I must say that calling the person a Bitcoin thief isn't justifiable because there were other cryptocurrencies like Ethereum and Doge present too. I think the government knows that creating such news is enough to attack the reputation of Bitcoin and create panic in the minds of the investors that it isn't safe and fraud people can do such bad things with it. Such clickbait title attract people because the word Bitcoin is used in it in a negative way.

The thing that's constantly moving in my mind is that why he transferred only 720 coins? what about the other coins that his brother stole? I mean it's clearly mentioned in the article that his brother successfully laundered 350,000 bitcoins. Were most of those bitcoins already seized by the agencies if yes then how could they left those 720 bitcoins?

[Lorence.xD]

5 Million dollars worth of crypto but only facing 4 years of sentence? is this really enough for that huge amount he had taken ?
not sure if I am too exaggerated but I think this is a lifetime sentence because there are many thief there that will risk their 4 years for this amount to live a luxurious life before being caught or after the imprisonment .

_________________________________________

But it is good that we are seeing something in process to take those abusers of crypto in Jail , and with this there is a true justice in a market that they called anonymous and hard to  be bring to justice .

If I remember correctly there's also a case about a man who abused the glitch in the ATM where he became a millionaire. When he surrendered to the police station he only got a year in the prison. So for sure he hide some money before he went to prison but before that he'd spent a lot of money like in a private jet. This cases it's like make people want to be a criminal it's like the best way to be instant millionaire with just a sacrifice of few years. I don't how the justice system works rn.

[yhiaali3]

The thief is a thief, whether the stolen items are bitcoins or dollars, so his natural place should be prison because of stealing people's money.

As smart as this thief is in stealing cryptocurrencies, as stupid as he is in hiding the impact of the richness that afflicted him due to theft, he had to avoid lavish expenses or flee to another country and live the life of the rich, but his stupidity landed him in the hands of the police.

The government is also happy to spread this kind of story to scare people off of bitcoin.

I am surprised by these people who have this great experience in stealing people's money, why don't they use their skills in useful work from which they earn money in a legitimate way.

[Poker Player]

If you are going to do something like this you really can't go out and start spending all that money and showing off.
Go out to nicer restaurants, fine. Drop $25000 in a club, not fine.
Get the fully loaded Honda Accord instead of a low end one, fine. Get a 7 series BMW, not fine.
Take a vacation and fly business class instead of coach and stay in a slightly nicer hotel fine. Charter a jet and rent a private villa for 3 weeks, not fine.

And so on.

In the end, these types of criminals are driven by greed and money that burns in their pockets.

It's actually a human tendency, most humans find it hard to restrain themselves from spending it when you have a lot of money. The problem is when giving free rein to impulses can land you in jail, as in this case.