Ohio Man Faces Prison Term for Laundering More Than $300 Million in Bitcoin

A physical mock-up of a cryptocurrency Bitcoin on Jan. 12, 2022. John Fredricks / The Epoch Times

Ohio-based Larry Dean Harmon has been sentenced to three years in prison for operating a cryptocurrency service used by criminals for laundering millions of dollars, according to the U.S. Department of Justice (DOJ).

Harmon, 41, ran a Bitcoin mixer called Helix that was “highly sought after by online drug dealers who needed to launder their illicit proceeds,” said a Nov. 15 statement from the department.

A mixer is a service that allows customers to send cryptocurrencies—in this case Bitcoins—to designated recipients in such a way that crypto owners remain concealed.

Helix was “one of the most popular mixing services on the darknet,” the DOJ notes. Between 2014 and 2017, “Helix processed at least approximately 354,468 bitcoin—the equivalent of approximately $311,145,854 in U.S. dollars at the time of the transactions—on behalf of its customers.

“Much of those funds were coming from or going to darknet drug markets. Harmon retained a percentage of these transactions as his commissions and fees for operating Helix.”

The department had earlier noted that Harmon formerly advertised Helix as a way to conceal transactions from law enforcement.

Darknet is a hidden part of the internet that requires special authorization to access and cannot be found through a search engine like Google.

Crypto mixing services are sought by people looking to keep transactions private since all blockchain transactions on Bitcoin are, by default, public.

Helix was linked to a darknet search engine called Grams, which Harmon also owned. He ensured that Grams and Helix supported all major darknet markets. Harmon developed an application program interface (API) that allowed darknet markets to integrate Helix into their Bitcoin withdrawal systems.

Harmon was charged in 2020 and pled guilty to conspiracy in U.S. District Court for the District of Columbia to commit money laundering in August 2021. He is mandated to forfeit cryptocurrencies, real estate, and monetary assets valued at more than $400 million.

In 2020, Don Fort, chief of IRS Criminal Investigation, said that Helix’s “brazenness” was the “most appalling aspect of this operation.”

“There are bad actors and then there are criminals who facilitate hundreds of other crimes,” he said.

Legal Action Against Mixers

Multiple other crypto mixers have faced legal action from American authorities over the past few years.

In March, a U.S. jury found Roman Sterlingov, a citizen of Russia and Sweden, guilty of operating a mixer called Bitcoin Fog, which the DOJ said was “among the longest-running and most prolific Bitcoin money laundering services on the darknet.”

Sterlingov operated the service between October 2011 and April 2021, moving more than 1.2 million Bitcoins, valued at almost $400 million at the time of the transactions.

The majority of cryptos were linked to illegal narcotics, identity theft, and computer fraud and abuse.  The service also had clients who were engaged in providing child sexual abuse material.

In November 2023, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned crypto mixer Sinbad.io for serving as a “key money-laundering tool” for the hacking group Lazarus. The group is backed by the North Korean government.

According to an August 2022 post by blockchain analysis company Chainalysis, crypto mixers protect the financial privacy of users transacting in digital currencies.

Mixers are especially critical to individuals who live under oppressive governments, as the services help them avoid being tracked.

Chainalysis points out that crypto mixers are not explicitly illegal in most jurisdictions. As far as the United States is concerned, such services must register as money transmitters under the Bank Secrecy Act (BSA).

The entities must maintain an anti-money laundering and KYC (know your client) program, and also meet all record-keeping and reporting requirements.

“Sanctions also matter for mixers. All mixers that want to do business in the U.S. must take measures to ensure they don’t do business with sanctioned entities,” Chainalysis notes.