A Texas resident who invested in Bitcoin at an early stage has been instructed to hand over the private keys, passwords, and access codes for his cryptocurrency wallets due to a court-issued restraint order, following his December sentencing to two years in prison for tax evasion.
In simpler terms, Frank Richard Ahlgren III, who misrepresented his income from selling more than 3.7 million dollars worth of Bitcoin (BTC) between 2017 and 2019, is required to pay approximately 1.1 million dollars back to the U.S. government as reparation.
Judge Robert Pitman at the Austin Federal Court on January 6th instructed Ahlgren, as well as anyone in his circle such as family members, acquaintances, or representatives, to disclose and deliver any hardware or software devices storing his cryptocurrency, together with any publicly accessible keys, private keys, recovery phrases (seed phrases) or passwords (passphrases).
Additionally, Pitman instructed the involved parties to disclose all crypto wallets linked to Bitcoin, Bitcoin Cash (BCH), Bitcoin Gold (BTG), Ether (ETH), and Litecoin (LTC). He prohibited any movement of Ahlgren’s cryptocurrency without prior judicial consent – this includes any actions that might disguise, devalue, or reduce their worth, except for regular monthly living expenditures.
The order remains active until Ahlgren fulfills any court-ordered restitution, unless a new court order states otherwise.
In September 2024, Ahlgren admitted guilt for submitting a falsified tax return, and he received his sentence in December of the same year.
In 2015, when Bitcoin reached about $465, he bought around 1,366 Bitcoins through Coinbase. He later sold approximately half of it in 2017 for roughly $5,800 per Bitcoin, totaling about $3.7 million. However, he overstated the initial cost of the Bitcoin on his 2017 tax return, which resulted in underreporting the actual capital gain.
As a researcher, I found myself in possession of Bitcoin that I sold for over half a million dollars during the years 2018 and 2019. However, I neglected to disclose these sales on my tax returns. The prosecution alleges that I employed various tactics to hide the specifics of these transactions, including using different digital wallets, conducting cash transfers in person, and utilizing mixers to obscure the details of these financial exchanges.
The total tax losses from all his actions are over $1 million.
He’s also ordered to serve one year of supervised release on top of his 24-month prison sentence.
According to Lucy Tan, the acting head of the IRS-Criminal Investigation’s Houston Field Office, the case of Ahlgren was a groundbreaking instance as it represented the initial criminal tax evasion trial focused exclusively on cryptocurrency.
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2025-01-08 07:09