Criminal’s Brother Swipes $5m Bitcoin Back From Darknet Seizure

Come listen to the story of Gary Harmon, brother to convicted Helix Dark Web Bitcoin mixer founder, and how he stole over $5m of Bitcoin law enforcement previously seized from Larry! This is eCrimeBytes.com S 2 Ep 7-4 Criminal’s Brother Swipes $5m Bitcoin Back From Darknet Seizure – Act 4: Sentencing.

Please check out the previous acts for the background:

Criminal’s Brother Swipes $5m Bitcoin Back From Darknet Seizure – Act 1: Helix, A Dark Web Bitcoin Mixer

Criminal’s Brother Swipes $5m Bitcoin Back From Darknet Seizure – Act 2: Meet Gary Harmon, Larry’s Brother

Criminal’s Brother Swipes $5m Bitcoin Back From Darknet Seizure – Act 3: Gary Is Caught

Sources:

Transcript:

00:00:10:00 – 00:00:19:13
Keith
Hey, welcome back to eCrimeBytes Season two Episode seven. We’re on the Concluding Act. Act four This is sentencing of Gary Harmon.

00:00:19:13 – 00:00:28:08
Keith
Ooh, there’s a lot to catch you up on. I’m going to I’m going to give you a real, real quick tour because we’re in Act four and I really strongly suggest you go back and watch the first three acts.

00:00:28:08 – 00:01:02:16
Keith
But if you are too stubborn, there’s a brother named Larry to another brother named Gary. So there’s Larry. Gary Harmon. Larry Harmon used to run this Bitcoin mixing service on the darknet, made a shit ton of money, was caught by the feds. They seized his money. Gary stole it back from law enforcement. Went on a spending spree at nightclubs had 100 at least $100,000 in cash and was sitting in a bathtub of it

00:01:02:16 – 00:01:04:07
Keith
was caught.

00:01:04:09 – 00:01:18:07
Keith
They went through his house. They seized things that we’re going to describe to you here in this act. And one of them was a Swiss Bitcoin watch was which was pretty interesting. So

00:01:18:07 – 00:01:29:06
Keith
with all that, there wasn’t a lot of information in this case. It was kind of like he was arrested and then he pled guilty in January 6th of 2023, which is this year.

00:01:29:06 – 00:01:34:01
Keith
It was really recent. So he pled guilty to one count of wire fraud. Now, if you remember,

00:01:34:01 – 00:01:40:08
Keith
he and his brother were charged in a lot more than this. But what he pled guilty to one count of wire fraud,

00:01:40:08 – 00:01:50:15
Keith
one count of obstruction of official proceedings. And I explained earlier that was the portion of stealing the money from his brother’s

00:01:50:15 – 00:01:52:11
Keith
brother’s seizure.

00:01:52:13 – 00:01:54:28
Keith
So basically interrupted that whole process

00:01:54:28 – 00:02:13:17
Keith
at the sentencing hearing, the defense argued and was hoping for 36 months or less. And that’s, you know, via thing called a pre-sentencing report that we’ve talked about in prior episodes. It kind of lays out their argument of why he should get less time in jail.

00:02:13:17 – 00:02:15:12
Keith
So the defense was three years or less.

00:02:15:15 – 00:02:31:12
Keith
The government, on the other hand, wants 51 to 63 months, and that’s not nice year boundaries, I know, but it’s somewhere from four to just over four years to just over five years. If we were to round down.

00:02:31:12 – 00:02:40:15
Keith
So in the sentencing hearing, they that when I say they I mean the defense made it sound like his

00:02:40:15 – 00:02:42:17
Keith
time in prison was very tough.

00:02:42:20 – 00:03:06:07
Keith
They said he paid a heavy price for his conduct. He spent the past 21 months living under unusually harsh conditions at three jails in Ohio, Oklahoma and Washington, DC and a federal prison in Pennsylvania. Now, if you’re remembering back in our last act, we told you he was not allowed out because he was a flight risk, because he had a lot of money and no ties to the community.

00:03:06:07 – 00:03:23:13
Keith
And that’s kind of what happens when you’re a flight risk. You’re stuck in jail. Jail sucks, you know. So they say he uses time in jail to think about all the terrible things that he did and how he will live his life upon his release.

00:03:23:13 – 00:03:29:03
Keith
They said he tried to do everything he could to give back the proceeds of his theft.

00:03:29:03 – 00:03:50:16
Keith
So we did a big time span jump for you here. We said that the feds went in, seized his shit, and they could only get about $6,000 off his Trezor wallet. Well, this time we found out during that time lapse he must have cooperated, at least to some extent. The defense is saying to a ton of an extent.

00:03:50:19 – 00:03:56:08
Keith
They’re saying he gave all the Bitcoin back. He said not only

00:03:56:08 – 00:04:20:03
Keith
you imagine there was there was money that was spent right in strip clubs and so forth. So there was money that was spent. But the defense is saying, yes, there was money that was spent. But since that time, Bitcoin has appreciated so much that you’re actually making more money back if you ignore the fact of the money that he spent, which I thought was pretty, pretty interesting argument.

00:04:20:05 – 00:04:21:01
Keith
So they said

00:04:21:01 – 00:04:36:17
Keith
when the Bitcoin was taken, the original value of 712 Bitcoin was $4.8 million. When he returned it, it was $12.3 million. So just under

00:04:36:17 – 00:04:45:08
Keith
well, just over twice the amount, right, for doing nothing, just basically owning the bitcoin. It appreciated over that time.

00:04:45:08 – 00:04:52:03
Keith
The the defense also said in the sentencing hearing, hey, this guy needs treatment.

00:04:52:04 – 00:05:04:28
Keith
They said he used a lot of drugs, he used a lot of alcohol. He smoked weed daily on the weekends. He drank decisively. He used cocaine

00:05:04:28 – 00:05:22:20
Keith
used ecstasy, used hallucinogens and didn’t specify which. They said his trip to Miami, which was the nightclub trip, was fueled by cocaine, ecstasy and alcohol, which sounds like I’ve never done cocaine or ecstasy, but that sounds like a pretty good trip.

00:05:22:20 – 00:05:23:02
Keith
Seth.

00:05:23:02 – 00:05:35:06
Keith
They said that Mr. Harmon recognizes that alcohol and drug use did contribute to his lack of judgment. And if you remember his text did say I was drunk, probably moved too much.

00:05:35:06 – 00:05:45:07
Keith
He said that his participation in substance abuse treatment while he served the remainder of his sentence would help him prepare for a better life on the outside.

00:05:45:08 – 00:05:51:11
Keith
Will be interesting to see if he gets it. So why don’t you tell us what he is sentenced to Seth.

00:05:51:14 – 00:05:57:15
Seth
So we sentencing happened in the spring of 2023 and end of April.

00:05:57:15 – 00:06:05:15
Seth
So there were two counts of count for wire fraud and a count for obstruction of an official proceeding. He got a total

00:06:05:15 – 00:06:18:03
Seth
51 months, and that’s concurrent terms of 51 months. It’s to each count of one and two. The defendant will be given credit for time served in the pretrial since 2021.

00:06:18:03 – 00:06:28:20
Seth
So he did got he kind of got off the hook, I guess. And because he couldn’t have he could have had to do them one after the other. But it’s still a good chunk of time.

00:06:28:22 – 00:06:30:16
Keith
Defense wanted 36 months.

00:06:30:16 – 00:06:38:16
Keith
Government wanted 51 to 60. So the judge gave him 51, which is the lower end of the government’s range.

00:06:38:19 – 00:06:45:13
Seth
Right. But it was still a good 20 months more than what the then what the plan defendants were looking for it. So,

00:06:45:13 – 00:06:57:04
Seth
Gary Harmon also has a supervised release that’ll be 36 months. Also concurrent special conditions of supervision. We’ve seen this before, substance abuse treatment here. It makes sense.

00:06:57:04 – 00:07:00:26
Seth
Substance use testing also makes sense as well as alcohol abuse treatment.

00:07:00:26 – 00:07:26:18
Seth
So there’s an attachment to the Gary Harmon sentencing, though, that also talks about a commitment order. So what is that? That here is the real property located in is Cleveland, Ohio. I’m sure that’s near Akron, particularly described as situated in the city of Cleveland, blah, blah, blah. It’s a residential condominium development and

00:07:26:18 – 00:07:39:26
Seth
this is in addition to his Audi S5 that we know he paid $52,000 for with a check and $285,000 or so from the local bank in the name of Gary Harmon.

00:07:39:26 – 00:07:42:09
Seth
All those were seized by the government.

00:07:42:09 – 00:07:57:00
Seth
There was more. They also took about 68 Bitcoin after required fees seized from the Blockfi account. There was a Cronoswiss wristwatch also seized from that same Cleveland, Ohio unit.

00:07:57:00 – 00:08:07:05
Seth
There was about 161 Bitcoin again. There was like a higher amount, but there were some fees associated that was seized from the wallets, reconstituted using seed words.

00:08:07:07 – 00:08:41:28
Seth
Another 17 million and Dogecoin began as a required piece seized from wallets, reconstituted using seed words, another two and change in Etherium, another kind of crypto coin cryptocurrency rather seized from wallets recounted using seed words and another 417 and Bitcoin answer required these seized from wallets recovered from an iPhone. So he really was spreading out his wealth literally and proverbially, and those are all seized by the government.

00:08:42:00 – 00:09:06:00
Seth
So the good news is there were no monetary penalties. Really. You got a $200 fine restitution, zero fine, zero. Another assessment, zero. All because there was nothing else to give. Take it. They took everything. We’ve never seen that before. Oh, by the way, Jones, I think that’s the first time we’ve seen where there was no fees other than this $200, because I guess they took everything out.

00:09:06:00 – 00:09:09:17
Keith
Yeah, they basically just made them forfeit everything. I think

00:09:09:17 – 00:09:16:14
Keith
the government actually more than made what he took, which is just astounding to me, where it was

00:09:16:14 – 00:09:21:21
Keith
4 million at one point. And then by the time the government got it, it was 12 million.

00:09:21:21 – 00:09:45:17
Keith
It’s just the. So here we’re at the end of the case. This is it, Gary, we got a sentence. We’re going to watch and see what happens to Larry and I hope to God there is not another brother in there named Barry or anything else. So let me give you my final thoughts on this case. One is this is the second or third time we’ve seen Trezor wallets.

00:09:45:17 – 00:10:10:06
Keith
I have a feeling we’re probably going to see them again and again. I’ve never actually run into them except for doing this podcast and going through crime. So immediately the researcher mind of mine goes, Wow, I wonder if Trezor wallets are really used for good purposes because it always seems like criminals that have their money in these these cases that we’ve been researching.

00:10:10:08 – 00:10:26:05
Keith
Now, another thought I had was it’s pretty damn hard to find a physical world equivalent of what happened here, which is a thief swiping money from law enforcement because of just how virtual currency can work. It’s just

00:10:26:05 – 00:10:42:00
Keith
if law enforcement seizes an object or money, it’s in their evidence locker under any other circumstance. So this cryptocurrency just put a complete wrinkle in there that I don’t think law enforcement was prepared for.

00:10:42:00 – 00:10:59:12
Keith
And I wasn’t. When I initially read this case, it just made for a really good case. I thought now, my last thought on this is four ish years. I know it’s a few months, over four years for 5.3 million ish in theft.

00:10:59:12 – 00:11:05:27
Keith
That’s not real bad. I mean, that’s about $1,000,000 a year. We’ve seen worse on our show.

00:11:05:27 – 00:11:36:26
Keith
We saw people, you know, throw their life away for $11,000. Now, the reason why I’m saying this out loud is because I’ve already researched the next two cases after this, and they’re going to be comparable. We’re going to be able to do some comparisons here. And so try to remember four years and $5 million later on, you’re going to probably hear like four years and X amount of dollars and you go, wow, that was a lot less or a lot more than that other case that we talked about.

00:11:36:29 – 00:11:49:10
Keith
And it’ll kind of give you a picture. And I’ve been trying to I talked with this about Seth and we’ve talked about this in our season one closure, which is I would like to come up with some kind of

00:11:49:10 – 00:11:58:20
Keith
measurement where we could say this person gave up X amount of their life for Y amount of gain, and we haven’t quite got there yet.

00:11:58:20 – 00:12:07:07
Keith
But four years for $5.3 million, that’s about as close as I can come up with a some kind of measurement here and we’ll see how that goes.

00:12:07:07 – 00:12:09:16
Keith
Do you have any final thoughts in this case?

00:12:09:18 – 00:12:39:18
Seth
You know, the only one that comes to mind is like arguably if the government had done a better job of seizing and containing and controlling the access to the funds, the second, you know, the whole brother stealing the money couldn’t have happened. Right. So in other words, this is for me similar to like if you are a cop and you make a big drug bust and you have you know, you can imagine you pick your movie or your Miami vice episode of evidence closet full of, you know, cocaine, right, in bags.

00:12:39:21 – 00:12:55:08
Seth
You know, if somebody went and stole that cocaine and then made money on that cocaine, shame on the cops are not locking it up better. Right? Or if money is seized directly from a bank account, that account is frozen. Right. If it’s part of a crime and then, you know, the money either gets reconstitute or emptied out or whatever.

00:12:55:10 – 00:13:13:29
Seth
Here, it sounds like the government didn’t really know what to do to really lock down a Trezor wallet, knowing that if you have the right passphrass, you can access it. So it just makes me wonder if the government has changed their approach to seizing Bitcoin via their wallets.

00:13:13:29 – 00:13:34:12
Keith
Although, I mean, when I did the research on this and I read that you could do that at the Trezor wallet, I was like mind blown didn’t even know that that technology existed out there. And I wonder if this was a surprise to the government too. I have a feeling because I know that they were watching the accounts and when they saw movement on the accounts they went, Oh shit.

00:13:34:14 – 00:13:42:03
Keith
And they went back to the hearing and they’re like, You have to give us your passwords. And then then when they put the passwords in there, like, Oh, money’s missing.

00:13:42:06 – 00:13:59:14
Seth
Exactly. Yeah, I thought that was interesting. For me. That’s one of the most interesting parts is, I mean, first of all, the balls to be able to steal money after it’s been seized by the government is I tip my hat to that. That’s that’s that’s some impressive hutzpah there.

00:13:59:17 – 00:14:06:29
Keith
You know you’re getting caught you know you’ve got to be caught because it’s just you and your brother basically, that have access to all this stuff. It’s crazy.

00:14:07:00 – 00:14:10:05
Seth
Well, you know, he cop to it. I have the passphrass is.

00:14:10:07 – 00:14:10:20
Keith
Yeah.

00:14:10:20 – 00:14:11:28
Keith
Do you have anything else before I close us out?

00:14:12:00 – 00:14:22:04
Seth
No, that was really for me, the most interesting part about this case. I’m not sure I’m able to do the mental calculus of a year. $1,000,000 a year for imprisonment, because you don’t get to keep any of it.

00:14:22:06 – 00:14:38:23
Keith
Yeah, true. All right, So this is the point where I usually give you a preview of next week. You’re going to hold on one second while I tell you where our website is. It’s e crime bytes, e c r I am e b y as in yellow milk.

00:14:38:26 – 00:14:40:04
Seth
And yellow milk.

00:14:40:06 – 00:15:05:11
Keith
t e s dot com. Please go there across the top if you’re on your desktop. You got all our social media links. If you’re on your phone, there’s a little button with three lines. Click on that and it’s got all our social media links down there. Now if you like anything in this act or this episode or anything you’ve seen us do, please give us a like and subscribe all those free things that you can give us.

00:15:05:14 – 00:15:29:26
Keith
It helps us move up the charts. If you’re on Apple Podcasts specifically, if you could please give us a five star review and say something nice. Apple Podcast is where half of our audio listeners come from, and doing that moves us up so more new listeners find us. So that would help us out a lot with that, let me give you a preview of next week.

00:15:29:26 – 00:15:58:23
Keith
Now, if you’ve seen a theme, and I’m going to continue this theme throughout the lifetime of eCrimeBytes, hopefully it’s picking cases with some weird ass facet. This one was being able to reconstruct the crypto currency in this case. Well, in the next case, not only did they steal money, but they stole hotel reward points too.

00:15:58:26 – 00:16:21:27
Keith
So what I’m going to bring you is a case where there are socially engineer reward points with an individual name, Chirag Patel, and it’ll be a lot of fun to listen to. So hope to see you back next week and we will get right into that case for you. Thanks for listening this week. And until then, stay safe and look forward to seeing you.

00:16:21:27 – 00:16:22:09
Seth
Thank you.

DrKeithJones.com

Criminal’s Brother Swipes $5m Bitcoin Back From Darknet Seizure – Act 4: Sentencing

Sources:

Transcript:

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