$4M BTC Sale Ends in Jail Time for Early Crypto Investor

Crypto News Regulation

$4 Million Bitcoin Sale Ends in Jail Time for Early Crypto Investor

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 13, 2024

Key Takeaways

Early Bitcoin investor Frank Richard Ahlgren III gets two years in prison for tax evasion, failing to report over $4M in crypto gains;
Ahlgren used crypto mixers and inflated purchase prices to hide profits, costing the government $1M in tax losses;
DOJ’s case proves crypto transactions aren’t untraceable, sending a clear warning to those trying to dodge taxes.

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$4 Million Bitcoin Sale Ends in Jail Time for Early Crypto Investor

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A major legal case in the US has wrapped up with Frank Richard Ahlgren III, an early Bitcoin BTC $91,470.48 investor, being sentenced to two years in prison.

Ahlgren, who is from Texas, was charged with not fully reporting the profits he made from selling Bitcoin between 2017 and 2019.

In addition to his prison time, Ahlgren will serve a year of supervised release and must pay $1.1 million back to the government. This case sends a strong message that tax evasion will not go unnoticed even in the crypto world.

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Ahlgren bought 1,366 Bitcoin in 2015 when prices were under $500 per coin, according to the Department of Justice (DOJ). In 2017, he sold 640 Bitcoin and made $3.7 million, which he then put into real estate.

However, problems came up when his tax filings showed he had inflated the original purchase price of the Bitcoin, making his profits look smaller. Furthermore, he did not report an additional $650,000 worth of Bitcoin sales in 2018 and 2019.

Stuart Goldberg, a DOJ tax official, said Ahlgren’s use of “sophisticated techniques” to hide his income caught up with him. He pointed out that Ahlgren went out of his way to deceive his accountant and federal authorities.

Ahlgren moved his money through several digital wallets and used crypto mixers to hide his transactions. The DOJ estimates that his tax evasion cost the government over $1 million.

Just like Ahlgren’s case, another high-profile lawsuit over Bitcoin and alleged tax fraud is making headlines. What’s the story behind Roger Ver’s legal battle? Read the full story.