TechFlow news — On December 13, the U.S. Department of Justice announced that Frank Richard Ahlgren III of Austin, Texas, was sentenced to two years in prison for falsely reporting $3.7 million in proceeds from Bitcoin transactions. According to court documents, Ahlgren began investing in Bitcoin in 2011 and purchased approximately 1,366 Bitcoins via Coinbase in 2015, when the price peaked at around $495.56. In October 2017, he sold 640 Bitcoins at about $5,807.53 each, using the $3.7 million profit to purchase a home in Park City, Utah.
To evade taxes, Ahlgren provided false transaction records to his accountant, falsely inflating the purchase cost far above the actual price. Between 2018 and 2019, he concealed over $650,000 in Bitcoin transactions through multiple wallet transfers, face-to-face cash deals, and cryptocurrency mixers. His tax evasion resulted in over $1 million in lost tax revenue. In addition to imprisonment, the court ordered him to pay $1,095,031 in restitution.
Lucy Tan, Acting Special Agent in Charge of the IRS Criminal Investigation’s Houston office, emphasized that this is the first criminal tax case focused entirely on cryptocurrency, and will serve as a significant warning to the industry. The IRS Criminal Investigation and the Texas Attorney General’s Office are continuing their investigation into the case.
