Ohio Man Admits to Taking Bitcoin Seized by Government

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A man from Ohio has pleaded guilty to stealing more than 712 Bitcoins that were confiscated by the US government in a criminal case. He has agreed to give up some digital currencies, including Bitcoin, Ether, and Petecoin, in exchange for his plea. The value of these forfeited assets is estimated to be more than $12 million.

US Citizen Confesses to Taking ‘Seized’ Bitcoin of His Brother

The United States Department of Justice (DOJ) announced on Friday that 31-year-old Gary James Harmon of Ohio has pleaded guilty to wire fraud and obstruction of justice for unlawfully taking the Bitcoin that were confiscated by the federal government in the criminal case of his brother Larry Harmon. The DOJ stated:

Harmon pleaded guilty to illegally taking more 712 bitcoins, which were forfeited by the authorities.

As part of his guilty plea, Gary Harmon has agreed to forfeit “cryptocurrency and other property derived from fraudulently taken proceeds, including more than 647.41 bitcoin (BTC), 2.14 ethereum (ETH) and 17,404,400, 64 dogecoin (DOGE)”, the Justice Department said. “Due to rising market prices, the total value of these forfeited properties exceeds $12 million.”

Stolen ‘Seized’ Bitcoin

The bitcoins were taken from a Trezor hardware wallet that was seized by the federal government in relation to Larry Harmon’s arrest in February 2020. The device was kept in an Internal Revenue Service (IRS) evidence storage. However, due to the complexity of the security features of the cryptocurrency, the authorities were not able to access it. The US Justice Department explained.

Larry Harmon pleaded guilty in August 2021 to money laundering conspiracy in connection with “his operation of Helix, a dark web-based cryptocurrency money laundering service, known as a ‘mixer’ or ‘tumbler’”, it was stated. The Department of Justice noted:

As Harmon admitted later on, Helix laundered more than 350,000 bitcoins, which was worth more than $300 million at the time of the transactions. The lion’s share of them came from darknet markets.

The authorities seized a number of assets in connection with his arrest, including a hardware wallet containing the proceeds of his illegal activities. However, Gary Harmon used his credentials to move 712 BTC from the seized device to his Bitcoin wallets, which was worth about $4.8 million at the time in April 2020. The funds were then sent through two online mixers to pay for his expenses, the Justice Department detailed.

The DOJ noted that the maximum sentence for wire fraud is up to 20 years in prison, while obstruction of justice carries a maximum sentence of 20 years.

This story has tags

FBI, IRS, Bitcoin Seized, btc seized, Crypto Seized, Cryptocurrency Seized, Government Crypto Theft, Government Crypto TheftFBI TheftIRS TheftUS Government.

What are your thoughts on Gary Harmon taking Bitcoin seized by the federal government? Share your opinion in the comments.

kevin helms

Kevin is an Austrian Economics student who discovered Bitcoin in 2011 and later became an evangelist. His interests lie in Bitcoin security, open source software, network effects, and the intersection of economics and cryptography.

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