Texas man charged with filing tax returns that falsely reported his cryptocurrency gains


Defendant purchased 3.7 million dollar home with bitcoin

Date: Feb. 7, 2024

Contact: newsroom@ci.irs.gov

A federal grand jury indicted a Texas man yesterday with filing false tax returns and structuring cash deposits to avoid currency transaction reporting requirements.

According to the indictment, between 2017 and 2019, Frank Richard Ahlgren III, of Austin, filed false tax returns that underreported or did not report the sale of $4 million worth of bitcoin in which he had substantial gains. All taxpayers are required to report any sale proceeds and gains or losses from the sale of cryptocurrency, such as bitcoin, on a tax return.  In 2017, Ahlgren allegedly used the proceeds from the sale of approximately $3.7 million worth of bitcoin to purchase a residence. Ahlgren allegedly filed a false 2017 tax return that inflated the price he originally paid for the bitcoin, thereby underreporting his capital gain from the sale. In 2018 and 2019, Ahlgren allegedly sold bitcoin for more than $650,000, and allegedly failed to report his sales of bitcoin on his 2018 and 2019 tax returns.

The indictment also charges that after selling some of his bitcoin to an individual in exchange for cash, Ahlgren made a series of bank deposits of the cash in amounts less than $10,000 each to avoid triggering currency transaction reporting requirements.

Ahlgren faces a maximum penalty of five years in prison for each structuring count and three years in prison for each false return count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Jaime Esparza for the Western District of Texas made the announcement.

IRS Criminal Investigation and the Texas Office of Attorney General are investigating the case.

Assistant Chief Michael C. Boteler and Trial Attorney Mary Frances Richardson of the Justice Department’s Tax Division and Assistant U.S. Attorney William R. Harris for the Western District of Texas are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.