Richard

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Bitcoin

Gary

Zero

A Bitcoin investor from Texas has become the first person to be imprisoned for failing to disclose crypto gains. The individual in question was sentenced to two years in jail today for filing a tax return that falsely underreported his capital gains from selling $3.7 million in Bitcoin. 
According to the US Department of Justice (DOJ), Frank Richard Ahlgren III, a Texas-based Bitcoin investor, “falsely underreported the (realized) capital gains” gained by selling Bitcoin worth $3.7 million from 2017 to 2019.&nbsp; 
In a report released on December 12, the Department of Justice stated: “All taxpayers are required to report any sale proceeds and gains or losses from the sale of cryptocurrency, such as Bitcoin, on a tax return.” 
<h3 id="span-style-font-weight-400-bitcoin-investor-takes-pride-in-playing-the-government-span">Bitcoin investor takes pride in playing the government</h3> 
As per the details provided in a US court, Frank Richard Ahlgren <a href="https://www.justice.gov/opa/pr/early-bitcoin-investor-sentenced-filing-tax-returns-falsely-reported-his-cryptocurrency" rel="nofollow noopener" target="_blank">started</a> investing in Bitcoin in 2011. Ahlgren then used his Coinbase accounts to acquire approximately 1,366 bitcoins in 2015.&nbsp; 
The highest price that Bitcoins sold for that year was approximately $495.56. Ahlgren sold approximately 640 Bitcoins in October 2017, at a price of approximately $5,807.53 per Bitcoin, for a total of $3.7 million.&nbsp; 
Ahlgren submitted a fake summary of his gains and losses from the sale of his crypto to his accountant when it was time to prepare his 2017 federal income tax return. In order to conceal the full extent of his gain, Ahlgren claimed that he purchased the Bitcoins at prices significantly higher than those he actually paid. 
“Frank Ahlgren III earned millions buying and selling Bitcoins,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “But instead of paying the taxes he knew were due, he lied to his accountant about the extent of a large portion of his gains, and sought to conceal another chunk of his profits through sophisticated techniques designed to obscure his transactions on the Bitcoin blockchain. That conduct today earned him a two-year sentence.”&nbsp; 
In 2018 and 2019, Ahlgren sold Bitcoins for more than $650,000 but did not disclose these sales on his 2018 and 2019 tax filings. This time, he concealed the information by having multiple wallets. 
He also used intermediaries to conceal the individual who executed the transaction and met an individual in person to exchange bitcoins for cash. That was not all. Due to his ‘success’ in circumventing the law, in May 2014, Ahlgren blogged about his knowledge of mixers as ways to add anonymity to Bitcoin transactions. 
<h3 id="span-style-font-weight-400-the-court-s-decision-span">The court’s decision</h3> 
According to Acting Special Agent in Charge Lucy Tan of the IRS-Criminal Investigation (IRS-CI) Houston Field Office, Ahlgren will receive a prison sentence. In addition to his sentence, US District Court Judge Robert Pitman for the Western District of <a href="https://www.cryptopolitan.com/texas-officially-filed-btc-strategic-reserve/">Texas</a> mandated that Ahlgren be subject to one year of supervised release and pay $1,095,031 in restitution to the United States. 
The United States government, under Biden, has sought to crack down on any crypto entity or individual who deems themselves smart enough to beat the <a href="https://www.cryptopolitan.com/us-crypto-ponzi-schemes-thriving-in-dubai/">system</a>. Warnings have been abundant under Gary <a href="https://www.cryptopolitan.com/elon-musk-in-a-fix-with-the-sec-and-gensler/">Gensler’s SEC</a>. 
The acting Special Agent in Charge gave a warning statement, saying, “This case marks the first criminal tax evasion prosecution centered solely on cryptocurrency. As the prices for crypto are high, so is the temptation to not pay taxes on its sale. Avoid the temptation and avoid federal prison.” 
The court asserted that the case serves as a testament to the fact that no one is exempt from the law.&nbsp; 
Lucy Tan adds, “This case demonstrates that no one is above the law. My team at IRS Criminal Investigation has the expertise and tools to track financial activity, whether it involves dollars, pesos, or cryptocurrency.”&nbsp; 
The IRS-CI and the Texas Office of Attorney General are investigating the case. 
Assistant Chief Michael C. Boteler, Trial Attorney Mary Frances Richardson of the Tax Division, and Assistant US Attorney William R. Harris for the Western District of Texas are prosecuting the case. 
From Zero to Web3 Pro: Your 90-Day <a href="https://www.cryptopolitan.com/crypto-career-launchpad-waitlist/?utm_source=cryptopolitan&amp;utm_medium=banner&amp;utm_campaign=ccl-waitlist-3" target="_blank">Career Launch Plan</a>

Early Bitcoin investor jailed for falsely reporting crypto gains in $4M BTC sale

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