By: Gustavo Bertolucci 12/13/2024 09:45
Pioneering Bitcoin Investor Gets Two Years in Prison for Failing to Declare Profits to IRS
In addition to the prison sentence, the investor will have to pay a million-dollar fine to reimburse the United States. "This case marks the first criminal prosecution for tax evasion focused exclusively on cryptocurrency," said a US revenue agent.
A court has sentenced a pioneering bitcoin investor to two years in prison in the United States after he failed to declare his profits from selling the digital currency.
As reported by Livecoins in September 2024, Frank Richard Ahlgren III, a resident of Austin, Texas, had previously pleaded guilty to failing to declare.
In addition, he was facing a trial that could sentence him to three years in prison. With the decision last Thursday (12), he will only have to serve two years in a closed regime, in addition to another year of supervised release in the USA.
In addition to two years in prison, pioneering bitcoin investor must pay fine to restitute US
According to the report, Frank Richard has made profits of US$3.7 million from the sale of bitcoins in recent years. An investor since 2011, when Satoshi Nakamoto was still present in discussions about the technology, Frank has accumulated thousands of coins.
In 2015, he returned to buying coins, accumulating another 1,366 BTCs, and kept his digital asset until 2017. This is because, in October of that year, he decided to buy a house and liquidated a large part of his coins on the Coinbase brokerage.
By claiming that he had purchased the bitcoin at a higher price than he actually paid, he submitted false statements to the IRS, the US Revenue Service. As a result, he was prosecuted by the state.
“Frank Ahlgren III made millions buying and selling bitcoin,” said Acting 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 earnings and attempted to hide another portion of his profits through sophisticated techniques designed to obscure his transactions on the bitcoin blockchain. This conduct earned him a two-year sentence today.”
He will now have to serve two years in prison, plus one year of supervised release. Finally, his conviction also requires him to pay a fine of US$1,095,031 in restitution to the United States.
“He believed transactions were untraceable,” says IRS agent who called the case the first US cryptocurrency tax evasion arrest
When commenting on the case, the IRS agent in charge who investigated Frank's case recalled that he believed that his transactions were not under the watchful eye of the tax authorities.
“Ahlgren will serve time because he believed his cryptocurrency transactions were untraceable. This case demonstrates that no one is above the law. My team at IRS-Criminal Investigation has the experience and tools to track financial activity, whether it involves dollars, pesos or cryptocurrency,” said Acting Special Agent in Charge Lucy Tan of the Houston Field Office of IRS-Criminal Investigation (IRS-CI). “This case marks the first criminal prosecution for tax evasion focused solely on cryptocurrency. As cryptocurrency prices are high, so is the temptation to avoid paying taxes on their sale. Avoid the temptation and avoid federal prison.”
The new alert with the arrest of the pioneering bitcoin investor sentenced to prison shows that authorities are paying attention to the technology.
"A big warning for us investors, whether we are sardines or whales"
Source from material: Livecoins
[This article is for awareness and financial guidance purposes, for more information consult an accountant or professional responsible for this area.]
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