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An Ohio man pleaded guilty in a money laundering conspiracy in which he moved more than $300 million worth of bitcoin to help users, including drug traffickers, hide the source of their cryptocurrency.
Larry Dean Harmon, 38, of Akron, agreed as part of his plea in Washington, D.C., federal court to surrender more than 4,400 bitcoins, currently valued at more than $200 million, according to the Justice Department.
Harmon, who maintained a residence in the nation of Belize during his criminal activity, also faces assessment of a $60 million civil monetary penalty from the Financial Crimes Enforcement Network, authorities said.
He will be sentenced at a date to be scheduled. He faces a maximum prison term of 20 years and potential fines of hundreds of millions of dollars.
The Darknet is the collection of websites hidden from normal search engines and web browsers. Its anonymized nature is exploited by criminals who trade weapons, narcotics and illegal services.
As part of his guilty plea, Harmon admitted that his Darknet-based service, Helix, partnered with several Darknet markets, such as AlphaBay, Evolution and Cloud 9, to provide bitcoin money laundering services for customers, the Justice Department said.
Helix, which Harmon ran from 2014 through 2017, was known as a “mixer” or “tumbler” of bitcoin. For a fee, Helix would send bitcoin to recipients in a way that hid who was sending that cryptocurrency.
Helix was linked with and associated with a Darknet search called “Grams,” which was also run by Harmon, who “advertised Helix to customers on the Darknet to conceal transactions from law enforcement,” the Justice Department said.
Prosecutors said that Helix moved over 350,000 bitcoins — valued at over $300 million at the time of the transactions for customers, with the largest volume coming from Darknet markets.
Harmon also admitted conspiring “with Darknet vendors and marketplace administrators to launder such bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces,” according to the department.
“The Darknet is driven in part by the criminal marketplaces which peddle their nefarious goods and services,” said James Lee, chief of the IRS Criminal Investigation Division.
“But these marketplaces thrive in large measure because of the infrastructure that supports them,” Lee said. “Harmon profited by facilitating the back-channel support of these marketplaces and helped criminals launder money they received via illicit activities.”
The Justice Department said the case was investigated by IRS’ Cyber Crimes Unit and the FBI’s Washington Field Office with the assistance of other federal entities.
The department also cited “essential support” for the probe from the Belize Ministry of the Attorney General and the Belize National Police Department.
