A longtime Bitcoin investor will spend the next two years in prison after under-reporting his BTC gains, according to the U.S. Department of Justice (DOJ).
In a new press release, the DOJ says Frank Richard Ahlgren III of Austin, Texas failed to accurately report the capital gains he earned after selling $3.7 million worth of Bitcoin.
He was sentenced Thursday to two years in prison for filing false tax returns.
The DOJ says taxpayers must report any gains or losses from the sale of cryptocurrencies like Bitcoin.
Says Stuart Goldberg, Acting Deputy Assistant Attorney General of the DOJ Tax Division,
“Frank Ahlgren III made millions buying and selling Bitcoins. But instead of paying the taxes he knew were due, he lied to his accountant about the size of much of his profits, and tried to hide another portion of his profits using sophisticated techniques that were designed to obscure his transactions on the Bitcoin blockchain. That behavior today earned him a two-year prison sentence.”
Ahlgren made his first purchase of Bitcoin in 2011 and in 2015 he acquired approximately 1,366 BTC using US crypto exchange Coinbase.
In October 2017, he sold approximately 640 BTC, each worth approximately $5,807 at the time, for a total of $3.7 million. He used most of the money to buy a house in Park City, Utah.
But when he filed his 2017 tax return, he told his accountant that he had bought the Bitcoin at a much higher price than he did, pretending that his profit was less. He also sold BTC in 2018 and 2019 for more than $650,000, but did not report the sales.
According to the DOJ, Ahlgren’s false returns helped him avoid paying more than $1 million in taxes. In addition to his two-year prison sentence, Ahlgren will be sentenced to one year of supervised release and pay $1,095,031 in restitution to the United States.
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