Texas Bitcoin Investor Frank Richard Ahlgren III Sentenced to 2 Years in Prison for Tax Evasion

The U.S. Department of Justice (DOJ) has charged a Texas Bitcoin investor with tax evasion. This is the first criminal prosecution for tax evasion linked to crypto.

A Texas Bitcoin investor has been charged with tax evasion by the U.S. Department of Justice (DOJ), marking the first criminal prosecution for tax evasion linked to cryptocurrency.

Frank Richard Ahlgren III, who has been involved in Bitcoin since 2011, allegedly failed to report capital gains on roughly $4 million in Bitcoin.

According to the investigation, Ahlgren purchased 1.366 Bitcoins in 2015 through Coinbase. At that time, Bitcoin’s price ranged from $495 to $5,807 per coin. By October 2017, Ahlgren had sold around 640 Bitcoins for $3.7 million.

However, when filing his 2017 federal tax return, Ahlgren lied to his accountant about his Bitcoin purchase prices. He inflated the prices to reduce his taxable gain and ultimately submitted a false return.

Following the investigation, U.S. District Court Judge Robert Pitman sentenced Ahlgren to two years in prison for tax evasion. The judge also ordered Ahlgren to pay $1,095,031.

Warnings from Authorities

Acting Special Agent in Charge Lucy Tan from IRS-Criminal Investigation stated that this case should serve as a warning to anyone attempting to evade taxes through crypto assets.

“This case demonstrates that no one is above the law,” Tan said. “The DOJ and IRS are increasing our enforcement actions. People involved in crypto transactions must follow tax reporting rules to avoid criminal charges.”

Other Bitcoin Tax Evasion Cases

Earlier this year, another high-profile case involved Roger Ver, who is known as “Bitcoin Jesus,” facing tax evasion charges. He allegedly avoided over $48 million in taxes after selling $240 million worth of cryptocurrency.

Ver’s case is particularly noteworthy due to the complexity arising from his renunciation of U.S. citizenship in 2014. He allegedly did this to bypass the “exit tax” requirement, highlighting the intersection of crypto holdings and international tax laws.

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