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In summary
- A Bitcoin investor was sentenced to two years for tax evasion after hiding $1 million in taxes.
- The investor used mixers and cash transactions to disguise gains of $3.7 million in BTC.
- Falsely declared purchase prices to reduce taxes after selling between 2017 and 2019.
A Satoshi-era Bitcoin investor was sentenced to two years in prison after incorrectly reporting capital gains from the sale of $3.7 million in BTC. This marks the conclusion of the first US criminal prosecution for tax evasion focused solely on cryptocurrencies.
Frank Richard Ahlgren III purchased Bitcoin in 2011, the last year of recorded contact with Bitcoin creator Satoshi Nakamoto. Ahlgren then sold his funds between 2017 and 2019 for $4.35 million, but misrepresented these figures to his accountant and in his tax returns. The total tax loss, calculated by the United States Department of Justice, exceeds $1 million. With his Cryptocurrency fortune, the Texas man bought a house.
As such, the tax fraudster has been sentenced to two years in prison, ordered to serve one year of supervised release and pay $1,095,031 in restitution.
“(He) made millions buying and selling Bitcoin,” Stuart M. Goldberg, Acting Assistant Attorney General for the Department of Justice’s Tax Division, said in a statement. “He lied to his accountant about the extent of a large portion of his profits and sought to conceal another portion of his profits through sophisticated techniques designed to conceal his transactions.”
Specifically, the Texas man attempted to hide how much he had earned from the investment, exchanging Bitcoin for cash in person, passing funds through multiple wallets, and using cryptocurrency mixers—protocols that attempt to conceal the sender and receiver of assets. He also artificially inflated the price at which he purchased Bitcoin to reduce the amount of taxes he owed.
“Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable,” said Lucy Tan, Acting Special Agent in Charge of the IRS Criminal Investigation Houston Field Office. “This case shows that no one is above the law. My team at IRS Criminal Investigation has the experience and tools to track financial activity, whether it involves dollars, pesos or cryptocurrencies.”
The Texas man bought Bitcoin in 2011, the same year Satoshi declared he would move on to other projects. Since then, the founder of Bitcoin has been missing, even though his creation has become more popular than ever. This remains the biggest unsolved mystery in the crypto ecosystem, although many have tried.
Edited by Stacy Elliott.
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