On December 12, a federal court in the Western District of Texas sentenced local resident Frank Algren III to two years in prison for concealing income from Bitcoin sales and filing false tax returns.

“Frank Algren III made millions by buying and selling Bitcoin. Instead of paying the taxes he knew were owed, he lied to his accountant about the extent of his profits and attempted to hide the rest,” the U.S. Department of Justice stated.

According to investigators, Algren began purchasing Bitcoin in 2011. In 2015, he bought approximately 1,366 BTC on Coinbase at prices below $495.56 per coin. In October 2017, he sold 640 BTC for $3.7 million and used the proceeds to purchase a home in Utah.

However, when filing his 2017 tax return, he significantly overstated the purchase cost of his Bitcoin, listing a figure higher than the market’s peak value at the time to reduce his taxable income.

In 2018 and 2019, Algren failed to report $650,000 in Bitcoin sales. Instead, he attempted to obscure his transactions by funneling coins through various wallets and cryptocurrency mixers.

In total, Algren evaded roughly $1 million in taxes. The court ordered him to repay the full amount to the government.

“Algren is going to prison because he thought his cryptocurrency transactions were untraceable. This case demonstrates that no one is above the law,” said Lucy Tan, Acting Special Agent of the IRS Criminal Investigation Division.

She noted that this is the first criminal case in the U.S. focused solely on tax evasion involving cryptocurrency.

Background: Earlier, Bitcoin.com founder Roger Ver, who faces up to 109 years in prison for tax evasion, accused the U.S. government of politically motivated persecution.