A Texas investor has been mandated to relinquish his cryptocurrency and related access credentials following a court order that stemmed from a conviction for tax fraud. Frank Richard Ahlgren III was sentenced to two years in prison in December for underreporting over $3.7 million in Bitcoin sales from 2017 to 2019 and now owes approximately $1.1 million in restitution to the U.S. government.
On January 6, a federal judge in Austin instructed Ahlgren and his associates to disclose all physical devices used for storing his cryptocurrency, as well as any associated access keys, including public keys, private keys, and passphrases. Furthermore, the court has prohibited the movement of Ahlgren’s cryptocurrency assets without prior judicial consent, emphasizing that any transactions that could potentially obscure or reduce the assets’ value are strictly forbidden, save for expenditures deemed necessary for monthly living.
This restraining order remains enforceable until Ahlgren fulfills his restitution responsibilities or the court issues a further directive. Ahlgren entered a guilty plea in September 2024, with the sentencing following in December.
The investor first entered the Bitcoin market in 2015, acquiring approximately 1,366 Bitcoin via a popular exchange when prices were around $465. In 2017, he sold nearly half of his holdings for about $5,800 per Bitcoin , yet manipulated his tax return to record a significantly reduced capital gain. From 2018 to 2019, he engaged in further Bitcoin sales totaling more than $650,000 without reporting these transactions.
Collectively, his actions resulted in tax losses exceeding $1 million. In addition to his prison term, Ahlgren has been assigned a year of supervised release, marking a significant case in the realm of cryptocurrency-related tax evasion.
