Prosecutors at the US Department of Justice ordered the 31 years old, Gary James Harmon to be placed behind bars for four years and three months for engaging in crypto crime. Harmon was accused of stealing a substantial amount of Bitcoin assets worth 712 Bitcoin (BTC) from his brother Larry Dean.
In January, Hamon pleaded guilty when he appeared before the court. The court alleged that Hamon engaged in wire fraud and violated US law, which could lead to 40-year imprisonment.
Factors Contributing to Increase in Crypto Crime
Harmon’s case was first reported in February 2022 by his brothers after losing 712 Bitcoin, valued at $21 million at press time. Initially, the value of the Bitcoin under probe was worth $4.8 million when the case was being reported at the DoJ.
Larry Dean was reported to accumulate measurable amounts of wealth from his coin-mixing business Helix. The operation of Helix engaged in money laundering activities conducted through crypto transactions.
In 2020 the law enforcer discovered Dean’s illegal business that generated more than 350 000 Bitcoin from 2014 to 2017. The attempt to maximize the gains compelled Dean to liaise with key players in darknet markets.
The revelation of Helix’s operation obliged the US regulators to take potential enforcement action against Dean. During a 2021 court proceeding, Dean pleaded guilty to the conspiracy of money laundering claims and unregulated money transfers.
Besides the court ruling, The Financial Crimes Enforcement Network (FinCEN) forced Larry Dean to settle a court fine amounting to $60 million. The FinCEN penalties were linked to the Helix violation of Anti-Money Laundering (AML) regulations.
Hamon Faces Court Charges
Following the prolonged legal proceeding, the law enforcers confiscated a measurable amount of assets, including the Helix crypto storage device, initially stored under lock and safe location. The Helix team had invested heavily in improving the security of the crypto storage tool to prevent third-party attacks.
In 2020, Dean’s brother Hamon reportedly attempted to weaken the security measures adopted on the Helix crypto security storage. After numerous failed attempts to access Helix’s core business infrastructure Harmon excelled in creating a “fake” Bitcoin wallet registered with his brother’s data.
The unauthorized access to the Helix Bitcoin storage tool enabled Hamon to drain $712 Bitcoins. The stolen amount of Bitcoin was laundered to other companies.
The prosecutors noted that Hamon sent the stolen assets to companies engaging in darknet businesses. At the preliminary investigation stage, Hamon agreed to return assets worth $17.4 million Dogecoin, 647 BTC and 2 Ethers valued at $20 million at the time of valuation.
Based on the DoJ observations, the Helix coin mixer integrated privacy tools to safeguard crypto transactions from malicious attacks. To improve the crypto transaction’s security, the Coin Mixer team adopted a unique grouping method to classify multiple transactions.
Legal Action to Address Crypto Crimes and Money Laundering
Recently, the US Treasury Department official adopted a restrictive approach to suspend the operation of the famous Tornado Cash in the region. The law enforcers observed that the Tornado group supported the North Korean hacking groups Lazarus Group to engage in cyber-related crimes.
Following the financial watchdogs’ potential actions on Tornado, the cash mixer developer Alexey Pertsev was sentenced to jail. After failing to acquire parole for the last nine months, the court in Dutch revealed plans to release Pertsev on bail.
Updating the Twitter community on his release, Pertsev wanted to understand what was happening in the crypto space from last August.
The suspension of Tornado activities in the US was opposed by Republican politician Tom Emmer and his ally, the National Security Agency whistleblower Edward Snowden. In addition, the official from Coin Center filed charges against the Treasury Department for blocking the Tornado activities in the US.
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