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Frank Richard Ahlgren III, a Bitcoin investor based in Austin, Texas, has become the first person to face criminal charges for not reporting capital gains from cryptocurrency.
The U.S. Department of Justice (DOJ) reported that Ahlgren made $3.7 million from the sale of 640 Bitcoin in 2017, which he later used to buy a luxury residence in Park City, Utah.
Breaking News: Texas Bitcoin investor Frank Richard Ahlgren III becomes the first to face criminal charges for failing to report crypto capital gains!
DOJ reveals Ahlgren sold $3.7M worth of BTC (2017-2019), concealed profits with mixers & underreported taxes. His actions… pic.twitter.com/6NgdK1qHt4
— Coinwaft (@coinwaft) December 13, 2024
DOJ reveals Ahlgren sold $3.7M worth of Despite significant earnings, the investor consistently falsified his tax returns submitted between 2017 and 2019, hiding profits and an additional $650,000 in Bitcoin transactions.
Ahlgren utilized advanced techniques to obscure his actions, including wallet transfers, crypto mixers, and cash transactions conducted in person.
His tax returns for 2017 also allegedly included inaccurate information regarding his Bitcoin acquisition costs, enabling him to avoid over $1 million in taxes.
The court sentenced Ahlgren to two years of imprisonment, one year of supervised release, and ordered restitution payments amounting to $1.1 million for these offenses.
How Will the Sentence Impact Other US Investors?
Acting Deputy Assistant Attorney General Stuart Goldberg emphasized the importance of this case as the “first criminal tax evasion prosecution centered solely on cryptocurrency.”
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In the wake of the conviction, Lucy Tran, who heads the IRS Criminal Investigation team, cautioned that contrary to popular belief in criminal circles, cryptocurrency transactions are not immune to law enforcement scrutiny.
Tan stated, “Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable.”
The case, which involves unreported Bitcoin sales totaling around $4 million, highlights the increasing regulatory efforts to combat tax evasion related to cryptocurrencies.
Similar Cases of Bitcoin Tax Evasion
The increase in tax offenses associated with cryptocurrencies has raised alarms for regulators globally.
Earlier this year, Roger Ver, commonly referred to as “Bitcoin Jesus,” was charged with evading over $48 million in taxes after liquidating $240 million worth of cryptocurrency.
Ver’s situation was further complicated by his choice to renounce U.S. citizenship in 2014, which allegedly enabled him to avoid the “exit tax” obligation.
These occurrences are not isolated. In April, Guy Ficco, the Chief of Criminal Investigation at the IRS, alerted to the rise in tax evasion cases linked to cryptocurrencies. Ficco pointed out that crypto assets, frequently utilized in fraudulent and money laundering activities, have long been a focus of IRS investigations.
However, the growing acceptance of digital currencies has elevated the tax authority’s oversight as a higher priority.
The post Texas Man Jailed for Evading $1M in Cryptocurrency Taxes appeared first on Cryptonews.
