An early crypto investor has pleaded guilty to filing tax returns that underreported the capital gains he earned from selling millions of dollars worth of Bitcoin (BTC).
According to the U.S. Department of Justice (DOJ), Frank Richard Ahlgren III bought approximately 1,366 BTC in 2015 when the flagship cryptocurrency was still trading for less than $500.
Two years later, he sold 640 BTC for $5,807.53 each for a total of $3.7 million. The lion’s share of the BTC he sold came from the Bitcoin he acquired in 2015.
The DOJ says Ahlgren used all the proceeds of the sale to purchase a house in Park City, Utah. He subsequently filed with the Internal Revenue Service (IRS) a false 2017 tax return which substantially inflated the cost basis of his Bitcoin purchases to underreport the capital gains from the sale.
In 2018 and 2019, Ahlgren again sold more than $650,000 worth of Bitcoin, but he did not report the sales on the tax returns for those years.
US taxpayers are required to report the gains or losses from the sale of crypto assets on their IRS tax returns. According to the DOJ, Ahlgreen’s false filings caused the IRS to suffer more than $550,000 in tax losses.
Ahlgreen’s sentencing will take place at a later date. He faces up to three years of jail time as well as a period of supervised release, restitution and monetary penalties.
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