Helix Operator Larry Dean Harmon Sentenced to 3 Years in Prison for Laundering Over $300 Million in Bitcoin

According to the US Department of Justice, Larry used Helix to help online drug dealers launder their illicit proceeds, processing over 350000 Bitcoin

Larry Dean Harmon, the operator of the crypto-currency mixing service Helix, was sentenced Friday to three years in prison for laundering over $300 million in Bitcoin, primarily for darknet drug markets.

Harmon was sentenced by U.S. District Judge Beryl Howell in Washington, D.C., more than three years after he pleaded guilty to the charges in a federal court in the District.

Harmon used Helix to help online drug dealers launder their illicit proceeds, processing at least 354,468 Bitcoin from 2014 to 2017, according to the Justice Department. A portion of the transactions were paid to Harmon as commissions for running Helix.

Harmon also established an Application Program Interface (API) and tailored some of Helix’s features, enabling darknet markets to incorporate Helix directly into their Bitcoin withdrawal systems, the government said. He also connected Helix to the darknet search engine, Grams, which increased the popularity of the mixing service in multiple darknet markets, according to the government.

Harmon was facing a maximum possible sentence of 20 years in prison, and prosecutors had asked for at least 75 months in prison. But Howell ultimately sentenced Harmon to 36 months in prison, followed by three years of supervised release. Harmon was also ordered to pay $311 million in cash and surrender seized cryptocurrencies, real estate and monetary assets valued at over $400 million.

Harmon closed Helix two years before he was apprehended, and the government said he had already begun to reform his conduct even before the case was presented to the court.

“Specifically, Harmon closed Helix, began cooperating with law enforcement, and took steps to divest himself of the proceeds of his crimes,” prosecutors said in a sentencing memo.

“Harmon’s sentence reflects his substantial assistance in the investigation and prosecution of the operators of Bitcoin Fog, which was a large and sophisticated darknet money laundering service.”

Harmon’s lighter sentence is also the latest example of how crypto-currency defendants are receiving lighter sentences for substantial assistance in other cases.

In November, Roman Sterlingov, the operator of Bitcoin Fog, was sentenced to 12.5 years in prison after Harmon testified against him at trial. Prosecutors had initially sought a sentence of 20 years for Sterlingov.

Sterlingov was convicted by a jury in June of conspiracy to launder money and operating an unlicensed money transmitting business. Prosecutors said Bitcoin Fog laundered over $1.2 billion in crypto-currency for darknet drug markets.

Harmon testified at Sterlingov’s trial that he met with Sterlingov in 2016 to discuss merging their two crypto-currency mixing services. Harmon said he ultimately decided against merging the services because he was concerned about the large amounts of money being laundered through Bitcoin Fog.

Harmon also testified that he closed Helix in 2015 after learning that law enforcement was investigating the service. He said he later began cooperating with the government and provided investigators with information about Bitcoin Fog.

Harmon’s testimony was a key piece of evidence in the government’s case against Sterlingov, and prosecutors said it helped them secure the conviction.

Agents of the Internal Revenue Service Cyber Crime Unit and the FBI Washington Field Office investigated the case with the support of the Belize Ministry of the Attorney General and the Belize Police Department, coordinated through the U.S. Embassy Belmopan. The investigation also included the Financial Crimes Enforcement Network, which previously fined Harmon $60 million.