Federal Prosecutors Accuse Grams Admin Of money Laundering in dark web $300M In Cryptocurrency
A Bath Township guy is charged in a federal courtroom with running a market operation that prosecutors said laundered more than $300M worth of cryptocurrency frequently used for illegal transactions in dark web markets.
Larry Dean Harmon faces several charges detailed in an indictment handed up by a grand jury in Washington, D.C. Federal prosecutors say Harmon, 36, ran a bitcoin mixer service that allowed clients to send bitcoin and obscure its origin. Such services are known as crypto “mixing” or “tumbling.”
Feds say Harmon’s operation, called Helix, partnered with the online dark web marketplace AlphaBay to provide money laundering for customers who accessed the market through the darknet, which isn’t accessible through traditional search engines used by most of the people.
AlphaBay was known as a place where customers went to buy drugs, counterfeited ID documents, and other illegal products. Federal authorities shut it down in 2017 and said drugs bought on what was then the largest dark web market were tied to overdose deaths.
Helix exchanged at least 354,468 BTC, the equivalent of about $311M at the time of the transactions, the indictment states. In addition to AlphaBay, the service was used in connection with the markets like Agora Market, Nucleus, and Dream Market.
The grand jury indicted Harmon in December, and his case was unsealed in federal court in Akron on February 6, the same day IRS and FBI agents arrested him. They searched his home and office properties in the Akron area. The same day, authorities in Belize searched a vacation property that Harmon leased, according to a court filing by Assistant United States Lawyers Daniel Riedl and Christopher Brown.
Harmon, who is the owner of the businesses Coin Ninja and Harmon Web Innovations, is charged with conspiracy to launder monetary instruments, operating an unlicensed money transmitting business.
Federal prosecutors are seeking millions of dollars in financial penalties. They want Harmon to forfeit his house on Yellow Creek Road, as well as additional property in Akron and Aurora, Colorado. Harmon has “massive” cryptocurrency assets, Riedl’s and Browns’ filing says. They cite the spreadsheet agents found that they say lists cryptocurrency and U.S. dollar assets totaling almost $57M and wrote that he might have other holdings the government hasn’t yet discovered.
United States Magistrate Judge Kathleen Burke in Akron on Tuesday ordered that Harmon stayed in the custody of the United States Marshals Service and sent to Washington, D.C., for prosecution. She had written in an order that the case against him shows up strong, that he faces a long prison sentence if convicted and that he has ties outside the country.
Harmon’s attorney didn’t immediately return a phone call.
In addition to Helix, Harmon owned a market search engine called Grams. His two operations were affiliated, and some referred to them as “Grams-Helix,” the indictment says.
Prosecutors said in court records that they found out in Harmon’s email account that showed a laptop with browser tabs open up for Helix and an administrator page for Grams. Authorities also recovered evidence during the search of his unit at the Grand Caribe resort in Belize that tied him to Gram and Helix, including external hard disks and tools used with cryptocurrency, Riedl and Brown wrote.
Harmon advertised Helix as a way to hide transactions from law enforcement, writing in August 2014, “There is absolutely no way LE would able to tell which addresses are helix addresses,” according to prosecutors.
Helix partnered with AlphaBay in November 2016. AlphaBay operators recommended that clients will work with a bitcoin mixing service and provided a link for Grams-Helix’s site, the indictment states.
An FBI agent transferred 0.16 BTC from an AlphaBay bitcoin wallet to Helix on Nov. 8, 2016. Helix exchanged it for an equivalent amount, less a 2.5% fee, based on the indictment.
Riedl and Brown wrote within their filing that Harmon was aware of the potential risk of law enforcement. He posted in one comment that he didn’t want any “UC,” or undercover agent, working for him, and asked, “Is it possible to guys think about anyways I could make him verify he wasn’t a UC?”
Harmon started shutting down Grams and Helix in Dec 2017, prosecutors state.
The Justice Department said Canadian citizen Alexandre Cazes, known online as “Alpha02” and “Admin,” was AlphaBay’s creator and administrator. He committed suicide while in custody in Thailand in July 2017, according to a news release.