The Harness was made to convert matter into energy and back again, but it had design flaws that made it unstable. It was thrown into Howard Stark's vault and it ended up on the streets, thanks to Obadiah Stane.
While the Maggia were robbing a Stark International truck, a henchman named Arthur Parks was curious about the device. When he put it on and activates it, he became the Living Laser and used his new powers to rob a bank. After Iron Man stopped him, he confiscated the vest and Arthur Parks found out in prison that he no longer needs the harness to utilize his powers.
In Look into the Light, the laser harness was used to reassemble the Living Laser who was split into two halves. It is unknown what happened to the device after it was used.