Frank Richard Ahlgren III from Austin, Texas, Bitcoin $100,177.5 He was sentenced to two years in prison for misrepresenting the profits from his sales. According to the statement made by the United States Department of Justice (DOJ), Ahlgren started investing in Bitcoin since 2011.
Bitcoin Investments and Sales
Ahlgren purchased 1,366 Bitcoins through his Coinbase account in 2015. That year, the Bitcoin price was around $495. By October 2017, the value of Bitcoin had increased and Ahlgren sold his 640 BTC for $5,807, making a total profit of $3.7 million.
Ahlgren understated his earnings by exaggerating the cost of purchasing Bitcoin in his 2017 tax return. In 2018 and 2019, he never declared Bitcoin sales exceeding $650,000. To hide his earnings, he made transfers to multiple wallets, converted Bitcoin into cash, and used mixers to anonymize transactions.
Imprisonment and Sanctions
The DOJ stated that Ahlgren’s actions resulted in a tax loss exceeding $1 million. U.S. District Court Judge Robert Pitman ordered Ahlgren to serve two years in prison, followed by one year of supervised release, and restitution of $1,095,031.
“Frank Ahlgren III made millions but didn’t pay taxes. “This behavior resulted in a two-year prison sentence.” -Stuart M. Goldberg, Deputy Director of the Tax Division of the Department of Justice.
“Ahlgren believed his cryptocurrency transactions were untraceable, but he will face penalties,” said Lucy Tan, Chief Investigator for IRS-Criminal Investigation’s Houston Field Office. “No one is above the law,” he said.
This case stands out as the first criminal case regarding tax evasion through cryptocurrency. The IRS emphasized that cryptocurrency transactions are traceable and such activities may result in legal sanctions.
It is important for cryptocurrency investors to declare their earnings correctly and fulfill their legal obligations. Experts state that regulations in this field have increased and recommend that investors seek professional support.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
