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An Ohio man pleaded guilty to a money laundering conspiracy in which he moved more than $ 300 million worth of bitcoin to help users, including drug traffickers, hide the source of their cryptocurrency.
Larry Dean Harmon, 38, of Akron, agreed to surrender more than 4,400 bitcoins, currently valued at more than $ 200 million, as part of his plea in federal court in Washington, DC, the Justice Department said on Wednesday.
Harmon, who was resident in the nation of Belize during his criminal activities, will also face a $ 60 million civil fine from the Financial Crimes Enforcement Network, authorities said.
He will be sentenced on a date to be determined. He faces a maximum prison sentence of 20 years and potential fines of hundreds of millions of dollars.
The darknet is the collection of websites hidden from normal search engines and web browsers. Its anonymized character is exploited by criminals who deal in weapons, narcotics and illegal services.
As part of his guilty admission, Harmon admitted that its darknet-based service, Helix, partnered with multiple darknet markets including AlphaBay, Evolution and Cloud 9 to provide bitcoin money laundering services to customers, the Justice Department said.
Helix, which Harmon operated from 2014 to 2017, was known as the “mixer” or “tumbler” of Bitcoin. For a fee, Helix would send Bitcoin to recipients in a way that hid who was sending that cryptocurrency.
Helix was linked to and linked to a darknet search called “Grams”, which was also operated by Harmon, which “advertised Helix to customers on the darknet to hide transactions from law enforcement,” the Justice Department said.
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Prosecutors said Helix moved over 350,000 bitcoins – worth over $ 300 million at the time of transactions for customers, with the largest volume coming from the darknet markets.
Harmon also admitted to having “conspired with darknet providers and marketplace administrators to launder bitcoins generated by illegal drug trafficking crimes on these darknet marketplaces,” according to the department.
“The darknet is in part powered by the criminal marketplaces that sell their nefarious goods and services,” said James Lee, chief of the IRS Criminal Investigation Division.
“But these marketplaces thrive to a great extent because of the infrastructure that supports them,” said Lee. “Harmon benefited from facilitating back-channel support for these marketplaces and helped criminals launder money obtained through illegal activity.”
The Justice Department said the case was being investigated by the IRS’s Cyber Crimes Unit and the FBI’s Washington Field Office, with assistance from other federal agencies.
The department also cited “substantial support” for the investigation from the Belize Attorney General’s Department and the Belize National Police Department.