Bitcoin "tumbler" pleads guilty to money laundering conspiracy

On August 18, 2021, the US District Court for the District of Columbia accepted Larry Dean Harmon’s plea of guilty to one count of conspiracy to launder monetary instruments in violation of 18 USC § 1956(h) – the first count of a 3-count indictment charging Harmon with money laundering conspiracy, operating an unlicensed money transmitting business, and transmitting money without a license. 

In the Statement of the Offense signed by the defendant, Harmon admitted to owning and operating a darknet search engine, Grams, that enabled the anonymization of users’ internet traffic; Harmon also operated a money transmitting and money laundering service called Helix, beginning in the summer of 2014.  Harmon posted online that Helix was a bitcoin “tumbler,” and could conceal transactions from law enforcement.  In practice, customers selling illegal goods and services paid Helix a fee to hold their bitcoin in a "wallet” and then transfer requested quantities of bitcoin from a different Helix wallet to designated recipients, thereby concealing the origins of the original bitcoin and preventing the transactions from being traced on the public blockchain.  Harmon operated Helix until December 2017.

Harmon acknowledged criminal responsibility for using Helix to launder transactions involving 354,468 bitcoins worth approximately $311,145,854, much of which constituted the proceeds of drug trafficking.  In conjunction with the guilty plea, a forfeiture money judgment has been entered in that amount.  Sentencing has not yet been scheduled.

In a civil action brought in 2020 by the Financial Crimes Enforcement Network, a civil money penalty of $60 million was assessed against Harmon for Bank Secrecy Act violations.  It represented the first time FinCEN imposed a monetary penalty on a virtual currency tumbler.

Plea Agreement | Statement of Offense

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