After the Bitcoin vanished from the device held by the IRS, agents found a photo on Gary Harmon’s cellphone showing him grinning in a tub full of cash at a nightclub. — Reuters
An Ohio man photographed lounging in a bathtub full of dollar bills must serve four years in prison for stealing 713 Bitcoin from a computer device seized by the government in a case against his older brother.
Gary Harmon, 31, was sentenced Thursday by US District Judge Beryl Howell in Washington, DC, where he pleaded guilty in January. He also agreed to forfeit crypto currencies and other property valued at more than US$20 million, the US Justice Department said.
Harmon admitted using his brother’s credentials to recreate eight Bitcoin wallets stored on a device in an Internal Revenue Service evidence locker in April 2020. He stole 713 digital valued then at about US$4.9 million. That Bitcoin was among 4,877 digital tokens seized from his brother, Larry, who was charged in February 2020 with laundering US$311 million in crypto transactions on Darknet sites.
After the Bitcoin vanished from the device held by the IRS, agents found a photo on Gary Harmon’s cellphone showing him grinning in a tub full of cash at a nightclub. Prosecutors say he used 68 Bitcoin as collateral for a US$1.2 million loan, and spent some to buy a luxury condo in Cleveland.
Harmon attended two bail hearings for his brother and learned in court that the government lacked the complex “seed phrase” to access the Bitcoin that his brother had stored on a Trezor device, according to court filings. Someone with that phrase and an additional PIN could take control of the Bitcoin from another device.
Prosecutors and Harmon’s lawyer differed over the level of sophistication required to pull off the theft, court filings show.
Harmon’s lawyer wrote that “while the conduct was certainly illegal, it is practically no different and no more sophisticated than obtaining a key to a safe deposit box and taking the contents of that box.”
But prosecutors countered, writing: “While physical world analogies often fall short when describing cyber incidents, the defendant’s conduct is more analogous to using powerful tools to silently tunnel into a bank vault from a neighboring building and siphon out all of the funds while law enforcement was futilely trying to unlock the bank’s front door.”
Harmon’s lawyer said his client has endured “extremely harsh conditions” during his 21 months in jail. He’d asked for a term of three years.
Larry Harmon pleaded guilty in 2021 and is awaiting sentencing. – Bloomberg
