Bitcoin Investor Ordered to Hand Over Crypto Wallet Keys in Unique Tax Case
Date: 2025-01-08 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Austin federal judge Robert Pitman has ordered Frank Richard Ahlgren III, who was convicted of tax evasion, to hand over the public and private keys to his crypto wallets, as well as the physical devices associated with their storage. The ruling comes after Ahlgren was sentenced to two years in prison in December.
Ahlgren evaded taxes between 2017 and 2019 by significantly underreporting his income from selling bitcoin. The amount of hidden capital amounted to more than $3.7 million, and the debt to the US government reached $1.1 million.
The court ordered Algren and his representatives to hand over all physical devices, public and private keys, recovery phrases, and to report the existence of any accounts related to Bitcoin, Bitcoin Cash, Bitcoin Gold, Ethereum and Litecoin. It is prohibited to make any transactions with cryptocurrency that could hide, reduce or devalue the assets, unless it concerns the payment of normal monthly expenses.
These restrictions will be in effect until the tax debts are fully repaid or until a new court order.
Algren pleaded guilty to filing a false tax return in September 2024. In his 2017 return, he artificially inflated the cost of acquiring bitcoins to hide the real income from their sale. Recall that in 2015, he purchased 1,366 bitcoins at a price of about $465 per coin, and two years later sold half of the asset for $3.7 million at a rate of $5,800.
From 2018 to 2019, Algren sold cryptocurrency worth over $650,000, but did not report this income in his tax returns. The investigation also found that he used multiple wallets, personal transfers, and mixers to hide the transactions.
The total damage to the treasury from his actions exceeded $1 million. In addition to two years in prison, Algren will have to spend a year under supervision.
Algren's case was the first criminal prosecution in the United States for tax evasion related exclusively to cryptocurrency, said Lucy Tan, acting special agent in charge of the IRS-Criminal Division.
