The cryptocurrency mixer "Helix" once operated on the dark web and was a popular tool for online drug dealers to launder their illicit gains, processing cryptocurrency transactions worth over $300 million from 2014 to 2017.
The U.S. Department of Justice announced last Friday that an Ohio man named Larry Dean Harmon will be sentenced to three years in prison and ordered to forfeit cryptocurrency and other assets valued at over $400 million. Harmon was charged in 2020 with conspiracy to commit money laundering related to his operation of the dark web cryptocurrency mixer service "Helix," and he received a lighter sentence from the judge for assisting the U.S. in prosecuting other cryptocurrency cases.
According to court documents, the 41-year-old resident of Akron, Harmon operated "Helix," a dark web mixing site responsible for laundering customers' Bitcoin. "Helix" was connected to "Grams," a dark web search engine also operated by Harmon. "Helix" was one of the most popular mixing services on the dark web and was highly sought after by online drug dealers needing to launder their illicit proceeds. "Helix" processed at least approximately 354,468 Bitcoins for its clients (including customers in the District of Columbia), equivalent to approximately $311,145,854 at the time of the transactions, with much of these funds coming from or going to dark web drug markets. Harmon earned a commission and fees from these transactions for running "Helix".
Harmon worked to ensure that "Grams" and "Helix" were connected or otherwise supported all of the major dark web markets at the time. Harmon developed an Application Program Interface (API) to allow dark web markets to integrate "Helix" directly into their Bitcoin withdrawal systems. He also customized features of "Helix" to ensure compatibility with significant markets. Investigators traced tens of millions of dollars in cryptocurrency from dark web markets to "Helix".
On August 18, 2021, Harmon pleaded guilty to conspiracy to commit money laundering. In addition to his three-year prison sentence, Harmon was sentenced to three years of supervised release; a forfeiture money judgment of $311,145,854; and the seizure of cryptocurrencies, real estate, and monetary assets valued at over $400 million.
Services like "Helix" are also known as "cryptocurrency mixing services," designed to hide cryptocurrency transactions (often illegal drug transactions) and the identities of the individuals involved. The longest-running "cryptocurrency mixing service" on the dark web was the notorious "Bitcoin Fog."
The Wall Street Journal reported that Harmon could have faced up to 20 years in prison, but due to his assistance in multiple other investigations, the judge in the case handed down a lenient sentence. This reportedly included his testimony in the trial of Roman Sterlingov, who operated another cryptocurrency mixer named "Bitcoin Fog." Sterlingov was sentenced to 12 years and 6 months in the U.S. earlier this month.
This announcement was made by Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Matthew M. Graves for the District of Columbia; Chief Guy Ficco of the IRS Criminal Investigation (IRS-CI); and Assistant Director Bryan Vorndran of the FBI’s Cyber Division.
The investigation was conducted by the IRS-CI Cyber Crimes Unit and the FBI Washington Field Office, with valuable assistance provided by the Justice Department’s Office of International Affairs and the U.S. Attorney’s Office for the Northern District of Ohio.
The Attorney General’s Ministry of Belize and the Belize Police Department provided essential support for the investigation, coordinated through the U.S. Embassy in Belmopan. The investigation was coordinated with the Financial Crimes Enforcement Network, which assessed a $60 million civil monetary penalty against Harmon in a parallel action.
Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Special Assistant U.S. Attorney Christopher B. Brown for the District of Columbia prosecuted the case, with valuable assistance from Trial Attorney Riane Harper and former Trial Attorney W. Joss Nichols of CCIPS, Paralegal Specialist Angela De Falco for the District of Columbia, and Assistant U.S. Attorney Daniel Riedl for the Northern District of Ohio.