Austin man tried hiding millions in bitcoin sales from IRS, indictment says

A federal grand jury this week indicted an Austin man on charges of falsely reporting his income after selling cryptocurrency worth $4 million, according to the U.S. Justice Department.

Frank Richard Ahlgren III filed phony tax returns that underreported or did not report his gains from the bitcoin sale, according to a news release from the Justice Department. Taxpayers must report any income, gains and losses, including those involving cryptocurrency. Ahlgren is also accused of cash structuring, or depositing cash at a bank in a series of small transactions, to avoid scrutiny by financial institutions or law enforcement.

Indictment says Ahlgren bought home with bitcoin gains, filed false tax returns

According to an indictment, Ahlgren used his share of the bitcoin money to purchase a home worth $3.7 million.

Ahlgren allegedly filed a false 2017 tax return that inflated the price he originally paid for the bitcoin, thereby underreporting his profit from the sale, the Justice Department said.

In 2018 and 2019, Ahlgren sold bitcoin for more than $650,000 and failed to report the sales on his tax returns, according to his indictment.

The indictment said that Ahlgren took cash from a bitcoin sale and made a series of deposits at a bank. Those deposits were less than $10,000 each to avoid reporting the transactions.

What punishment could he face if convicted?

If convicted, Ahlgren could face a maximum penalty of five years in prison for each structuring count and three years in prison for each false return count.

This article originally appeared on Austin American-Statesman: Austin man indicted for tax fraud, not reporting bitcoin income