Cleveland man who once sat in bathtub full of cash after stealing $5 million in seized bitcoin sentenced to prison

CLEVELAND, Ohio – A Cleveland man was sentenced Thursday to more than four years in prison for stealing about $5 million in bitcoin that federal agents had seized from his brother.

Gary Harmon, 31, used the stolen bitcoin to spend lavishly, including converting some of it into $100,000 in dollar bills which he used to fill a bathtub and sit in at a Miami club.

Harmon took the bitcoin after federal agents seized more than $300 million from his brother, who ran a bitcoin laundering network called Helix.

U.S. District Judge Beryl Howell in Washington, DC, sentenced Harmon to four years and three months in prison for wire fraud and obstruction of justice.

Harmon’s brother, Larry, pleaded guilty in August 2021 to conspiring to launder $311 million worth of bitcoin through the cryptocurrency money service, known as a “mixer” or “tumbler”. The funds came mostly from darknet drug dealers, according to prosecutors.

He has not yet been sentenced because he continues to cooperate with federal investigators, according to court records.

After authorities moved to seize Larry Harmon’s assets in 2020, his brother removed as much cryptocurrency from his brother’s account as he could manage, federal prosecutors said.

Gary Harmon knew that investigators were struggling to crack one cryptocurrency device because he attended court hearings where IRS agents testified that they were concerned someone could transfer bitcoin from a device that agents had seized.

That’s exactly what Gary Harmon did, according to prosecutors. He used his brother’s credentials to recreate his brother’s bitcoin wallets from the device, then transferred 712 bitcoins to his own wallets, valued at $4.8 million at the time, prosecutors said.

Gary Harmon laundered the bitcoin through two online mixer services before using it to make expensive purchases, including a 2018 Audi S5, a Swiss watch, custom work on a Lamborghini and a luxury condominium in the Nikolai Building at West 37th Street and Clinton Avenue in Cleveland’s Ohio City- the area,

In June 2021, he “extravagantly” spent a night at a Miami club that accepts bitcoin, according to prosecutors. He spent $25,000 renting a so-called “whale room” from midnight to Later he sat in a bathtub full of cash at the club.

Prosecutors said the bill was likely much higher, based on text messages seized from his phone in which he ordered 10 girls to stay in his room at the club for the night.

FBI agents arrested him shortly after, on June 28, 2021, and seized the bitcoin, about $284,000 from his bank and apartment.

The bitcoin he stole and laundered increased in market value, growing to $20 million, according to prosecutors.

Defense attorney Ned Smock of the federal public defender’s office in Washington, DC, wrote in court records that his client cooperated with investigators and helped them find the stolen bitcoin he had hidden.

He wrote that Gary Harmon grew up in Northeast Ohio, attended Baldwin Wallace and Kent State universities and worked as a stone bench installer. He later worked in marketing in Cleveland and Phoenix before returning home to work at his brother’s company, Coin Ninja, which promoted the wider use of cryptocurrency.

During the time he stole the bitcoin from under federal agents, he used large amounts of alcohol, cocaine, ecstasy and hallucinogens, Smock wrote.

“Mr. Harmon acknowledges that his conduct was immature, illegal and inexcusable, and he has done everything in his power to accept responsibility and make the government whole,” Smock wrote in court documents.

Adam Ferrise covers federal courts at cleveland.com and The Plain Dealer. You can find his work here.