Frank Richard Ahlgren III, a Satoshi-Era #Bitcoin adopter from Texas, has been sentenced to two years in prison for crypto tax fraud.
Ahlgren was found guilty of filing false tax returns and underreporting considerable capital gains from his Bitcoin investments.
The Case Against Ahlgren
Between 2017 and 2019, Ahlgren filed federal tax returns that either misrepresented or completely omitted substantial profits from Bitcoin sales. Notably, Ahlgren began purchasing Bitcoin as early as 2011.
His most notable transaction occurred in 2017 when he sold 640 BTC tokens for $3.7 million. Using the proceeds, he purchased a house in Park City, Utah.
However, Ahlgren misled his accountant during the preparation of his 2017 tax return. In particular, he inflated the purchase price of his Bitcoin holdings, thereby underreporting his actual capital gain from the sale.
In addition to his 2017 false reporting, Ahlgren made further efforts to conceal his Bitcoin transactions in 2018 and 2019. These efforts included transferring Bitcoin through multiple wallets, conducting in-person cash exchanges, and utilizing mixers to obfuscate the source of his transactions.
Despite these efforts to hide his activity, the IRS Criminal Investigation team was able to track the transactions. They uncovered a total tax loss exceeding $1 million.
Acting Deputy Assistant Attorney General Stuart Goldberg emphasized that Ahlgren’s attempts to hide his gains would not go unpunished. “Ahlgren believed his crypto transactions were untraceable, but the law applies to everyone, regardless of the medium,” said Goldberg.
