(Bloomberg) -- An Ohio man who was photographed lounging in a bathtub full of dollar bills pleaded guilty Friday to the theft of millions of dollars of Bitcoin from a computer device seized by the government in a money-laundering case against his older brother.

Gary Harmon, 31, told a federal judge in Washington, DC, that he used his brother’s credentials to recreate eight Bitcoin wallets stored on a device in an Internal Revenue Service evidence locker in April 2020. As authorities watched helplessly, Harmon swiped 713 digital tokens valued at about $4.9 million. They’re now worth more than twice that amount.

The Bitcoin was among 4,877 digital tokens seized from his brother, Larry, who was charged in February 2020 with laundering $311 million in crypto transactions on Darknet sites where illegal drugs were sold. Larry Harmon faced the first charges related to mixing, the practice of jumbling together tokens from different owners to make them harder to trace.

After the Bitcoin vanished from the device held by the IRS, Gary Harmon started living large. A photo on his cellphone showed him grinning in a tub full of cash at a nightclub. Agents traced 519 of the stolen Bitcoin through two mixers, filings show. Prosecutors say he used 68 Bitcoin as collateral for a $1.2 million loan, and spent some to buy a luxury condo in Cleveland.

 

Harmon’s sentencing is scheduled for March 17. His estimated range of potential prison time, which is usually spelled out in a plea agreement, is unclear. He could face 51 to 78 months, depending on how US District Judge Beryl Howell rules on whether he used “sophisticated means” to commit his crimes and whether the obstruction element boosts the range.

The judge won’t decide what his range is until sentencing, and has discretion to go above or below the range.

Howell had continued the plea hearing from last month after she raised a question about how the obstruction applied. 

Harmon will remain in jail until he’s sentenced. He appeared in court wearing a dark green jumpsuit indicating he’s being held at a jail in Alexandria, Virginia. He said little during the hearing and appeared calm, and shook his lawyer’s hand before being taken back into custody. He’s been in jail since his arrest in June 2021.

Harmon’s lawyer Ned Smock and assistant US attorneys Christopher Brown and C. Alden Pelker declined to comment following Friday’s plea. 

Access Code

As part of his plea, Harmon admitted he attended two bail hearings for his brother. Prosecutors have said he learned they lacked the complex “seed phrase” to access the Bitcoin that his brother had stored on a Trezor device. Someone with that phrase and an additional PIN could take control of the Bitcoin from another device. 

“When you made the transfers, did you do so under the false and fraudulent pretense that you were lawfully authorized to make such transfers when you, in fact, had no claims to the contents of the subject wallets?” Howell asked Gary Harmon on Dec. 22. Harmon admitted he did, and said he knew the wallets were subject to a forfeiture proceeding. 

While prosecutors initially suspected Larry Harmon of the theft, he told them the culprit was Gary, who had worked for him. After his brother’s arrest, Gary supported himself with Covid stimulus funds and Ohio unemployment checks, court records show. 

Gary Harmon was indicted in June 2021 on eight counts of money laundering, one for obstructing an official proceeding and one for removing property to prevent seizure. Earlier this year, Harmon turned down two plea offers. He pleaded guilty to a criminal information charging him with wire fraud and obstruction of an official proceeding. 

Larry Harmon has also pleaded guilty and awaits sentencing. 

The case is US v. Harmon, 21-cr-00433, US District Court, District of Columbia.

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