Something Is Better Than Nothing
An odd case of stealing seized Bitcoins right under the nose of Internal Revenue Services (IRS) was heard by a US trial court.
It is extremely shocking to learn that someone was actually able to steal funds right under the watch of one of the major regulators in the US.
Department of Justice, USA (DOJ) told the media that a man named Gary James Harmon was tried for stealing federal authority-seized Bitcoins.
The department revealed that Gary Harmon is the brother of a convict named ‘Larry Harmon’, who was the prime suspect in a Bitcoin fraud.
According to DOJ, Larry Harmon was involved in the notorious Bitcoin embezzlement committed by ‘Helix’ a few years ago. He mentioned that the person is used to carrying out thefts involving crypto funds.
Bitcoin Thief Stole Proceeds of Crime
Larry was associated with the darknet network of Helix which single-handedly stole 350,000 units of Bitcoin. However, Larry was apprehended by the authorities later in February 2020 and since then is under judicial arrest.
He was then tried before a Trial Court where he pleaded guilty and agreed to forfeit 712 Bitcoins. The said Bitcoins, which were proceeds of the crime, were thereafter seized from Larry’s possession.
The seized Bitcoins were held in the federal custody of the IRS and were lying in a Trezor hardware wallet seized from Larry’s possession.
Since the seizing authorities were unable to gain access to the hardware, they kept the hardware in the evidence locker. It was thought that the funds would remain safe in the evidence locker.
Wire Transfer of Federally Secured Seized Bitcoins
In the meantime, and during the course of Larry’s trial, Gary somehow used the credentials of his brother and accessed the seized Bitcoins.
In April 2020, Gary proceeded to illegally transfer 712 Bitcoins (valued at $4.8 Million at the relevant time) into his personal wallet.
Gary converted the proceeds of crime that he had illegally wire transferred and used them for meeting his personal expenditures. He used the funds for his personal reasons and spent them on a large scale.
However, the authorities identified Gary as the ‘Bitcoin thief’ who was also later arrested and brought before the trial.
The trial hearing was fixed last week. In the hearing, Gary voluntarily pleaded guilty on both accounts namely illegal and fraudulent wire transfer and obstruction of justice.
Gary told the Court that he gained access to secured hardware and transferred Bitcoins from the hardware into his personal wallet.
He also committed before the Court that he would return the stolen funds. Subsequently, he agreed to forfeit 647 units of Bitcoins, 2 Ether coins, and a further 17 million units of meme coin Doge.
It is a huge number of funds that Gary claimed he had in his possession and would amount to millions of dollars.
It may however be noted that since 2020 till to date, the value of Bitcoin has changed drastically. The stolen Bitcoins were worth less than $5 Million at that time. However, today, their value exceeds $12 Million.
US Law of Sentencing
Under US laws, crimes such as fraudulent and illegal transfer of funds and obstructing justice, are severe crimes. The punishment for such crimes is also quite harsh.
For instance, the maximum sentence is 20 years on each account namely obstructing justice and illegal wire transfer.
Since Gary has pleaded guilty, hence, he may be awarded a lesser sentence than the maximum punishment of 20 years on each account.
However, it is the discretion of the Court whether to give a compensatory punishment or full one.
According to DOJ, the authorities have already obtained possession of the digital funds which Gary had agreed to forfeit.
The case is odd further because both brothers have been taken into custody and one is sentenced and the other is awaiting it.