A Texas federal court has ordered Frank Richard Ahlgren III to surrender his cryptocurrency private and public keys as part of a tax fraud investigation.
Court Order to Surrender Cryptocurrency Keys
Federal Judge Robert Pitman in Texas ordered Frank Ahlgren III and his family and associates to surrender any devices and keys related to cryptocurrency wallets. The order concerns Bitcoin, Bitcoin Cash, Litecoin, and Ether and prohibits any cryptocurrency transactions without court approval, except for necessary monthly living expenses.
History of Tax Fraud
Ahlgren pleaded guilty to underreporting capital gains from the sale of 366 Bitcoins amounting to $3.7 million between 2017 and 2019. He inflated the purchase cost on his 2017 tax return to mask the true capital gains. Between 2018 and 2019, he sold Bitcoin worth over $650,000 without reporting these sales in his tax returns.
Consequences and Sentence
The total tax losses exceeded $1 million. Ahlgren was sentenced to two years in prison followed by one year of supervised release. This case marks the first U.S. criminal tax evasion prosecution focused solely on cryptocurrencies, led by the IRS-Criminal Investigation in Houston.
The court order remains effective until restitution is fulfilled or further court orders are issued. This case emphasizes the importance of transparency in reporting cryptocurrency transactions.
