Ohio resident pleads guilty to running Bitcoin “mixer” money laundering scheme
More than $300 million went through Darknet-based bitcoin hashing (BTC) service
An Ohio man faces up to 20 years in prison and multimillion-dollar fines after pleading guilty to money laundering conspiracy charges in federal court.
Larry Dean Harmon pleaded guilty to charges against him, including laundering more than $300 million while running a Darknet-based Bitcoin hashing service called Helix.
According to a Department of Justice (DoJ) statement, Harmon laundered more than 350,000 Bitcoins through Helix between 2014 and 2017. Helix functioned as a "Bitcoin mixer," permitting customers to send the cryptocurrency to designated recipients in a manner that concealed the source of the original transfer.
The Helix service enabled users to "mix" their coins with other users' funds to form a common pool of funds. This allowed the coins to become fully anonymous, making tracing these funds difficult, if not impossible.
The defendant said he knew about the illegal origin of the funds funneling through the service. Helix was linked to and affiliated with "Grams," a Darknet search engine also operated by Harmon. Harmon advertised Helix to customers on the Darknet to hide the transactions from law enforcement.
The accused also revealed that Helix worked with several Darknet markets, including AlphaBay, Evolution, Cloud 9, and others, to provide Bitcoin money-laundering services to market customers. Harmon also admitted he conspired with Darknet vendors and marketplace administrators to launder Bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces.
“Darknet markets and the dealers who sell opioids and other illegal drugs on them are a growing scourge,” said acting US Attorney Channing Phillips for the District of Columbia.
“They may try to hide their identities and launder millions in sales behind technologies like Helix. But the department and its law enforcement partners will shine a light on their activities, dismantle the infrastructure such criminal marketplaces depend on, and prosecute and convict those responsible.”
During previous hearings, the defendant tried to prove Bitcoin is not money, so he could not be guilty of money laundering. However, Judge Beryl Howell rejected this argument.
“The term ‘money’ generally means a medium of exchange, a method of payment, or a store of value. This is true for Bitcoin,” she ruled.
As part of the proceedings, 4,400 Bitcoins — a $197 million value at the time of this writing — had been confiscated from Harmon. The date Harmon will receive his verdict has yet to be determined, as prosecutors said
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