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Satoshi Era Bitcoin Investor Gets 2 Years in Prison for Tax Evasion
A Satoshi era Bitcoin investor has been sentenced to two years in federal prison after being found guilty of tax evasion. The case highlights the importance of accurately reporting cryptocurrency transactions and paying taxes on gains.
Frank Richard Ahlgren III, an early Bitcoin investor, initially purchased approximately 1,366 BTC through Coinbase in 2015. At the time, the price of Bitcoin peaked at $495.56 that year. In October 2017, he sold 640 BTC for $3.7 million, using most of the proceeds to buy a property in Park City, Utah.
However, Ahlgren failed to disclose these transactions on his tax returns and instead provided his accountant with incorrect data, inflating the purchase prices of the BTC he sold. This allowed him to significantly underreport his taxable income.
In subsequent years, Ahlgren continued evading taxes by selling over $650,000 worth of Bitcoin in 2018 and 2019 but failed to disclose these transactions on his tax returns. He also employed complex methods such as transferring BTC through multiple wallets, meeting individuals for cash exchanges, and using mixers to anonymize transactions.
The IRS uncovered Ahlgren’s activities after he allegedly lied to his accountant and attempted to conceal another portion of his profits by hiding them in various cryptocurrency accounts.
In a statement, Acting Deputy Assistant Attorney General Stuart M. Goldberg emphasized the seriousness of Ahlgren’s actions: “Frank Ahlgren III earned millions buying and selling bitcoins. However, instead of paying the taxes he knew were due, he lied to his accountant and sought to conceal another part of his profits through sophisticated techniques designed to obscure his transactions.”
The IRS Criminal Investigation (IRS-CI) also highlighted the broader implications of the case: “Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable,” said Acting Special Agent in Charge Lucy Tan. “This case demonstrates that no one is above the law. My team has the expertise and tools to track financial activity, whether it involves dollars, pesos, or cryptocurrency.”
U.S. District Court Judge Robert Pitman ordered Ahlgren to pay $1,095,031 in restitution to the United States and serve one year of supervised release following his prison term.
The investigation was conducted by IRS-CI and the Texas Office of Attorney General, with prosecution handled by the Department of Justice’s Tax Division and the U.S. Attorney’s Office for the Western District of Texas.
Source: www.cryptonewsz.com
