An ancient Bitcoin investor is going to spend the next two years in prison after underreporting his BTC gains, according to the U.S. Department of Justice (DOJ).
In a new press release, the DOJ says that Frank Richard Ahlgren III of Austin, Texas failed to accurately report the capital gains he earned after selling $3.7 million in Bitcoin.
He was sentenced Thursday to two years in prison for filing false tax returns.
The DOJ says that taxpayers are required to report any gains or losses from the sale of cryptocurrencies like Bitcoin.
Says Stuart Goldberg, the Acting Deputy Assistant Attorney General of the DOJ’s Tax Division,
“Frank Ahlgren III earned millions buying and selling Bitcoins. 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.”
Ahlgren made his first purchase of Bitcoin in 2011 and in 2015, he acquired about 1,366 BTC using top US crypto exchange Coinbase.
In October 2017, he sold about 640 BTC, each worth about $5,807 at the time, for a total of $3.7 million. He used most of the funds to buy a home in Park City, Utah.
But when he filed his 2017 tax return, he told his accountant he purchased the Bitcoin at a much higher price than he did, pretending his gains were less. He also sold BTC in 2018 and 2019 for over $650,000 but failed to report the sales.
According to the DOJ, Ahlgren’s false filings helped him avoid having to pay more than $1 million in taxes. In addition to his two-year prison term, Ahlgren is ordered to serve one year of supervised release and pay $1,095,031 in restitution to the United States.
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