DOJ: Austin man allegedly pleads guilty to $4M crypto-related tax fraud

AUSTIN (KXAN) — An Austin man pled guilty to allegedly committing nearly $4 million in cryptocurrency tax fraud, in federal court on Sep. 3.

KXAN previously reported in February 2024 that Frank Richard Ahlgren III was arrested after he allegedly underreported a 2017 sale of $3.7 million in bitcoin and failed to report $650,000 in sales on his 2018 and 2019 taxes.

Ahlren's case was investigated by the IRS Criminal Investigation and the Texas Office of Attorney General.

"He used the entirety of the proceeds from the sale of bitcoins to purchase a house in Park City, Utah. Ahlgren then filed a false tax return with the IRS for 2017 that substantially inflated the cost basis of the bitcoins, and therefore underreported his capital gain from his bitcoin sale," DOJ said in its release. "In total, Ahlgren caused a tax loss to the IRS of more than $550,000."

On request from U.S. District Judge Robert Pitman, U.S. Magistrate Judge Mark Lane looked into the plea agreement and recommended it be accepted by the court.

The plea agreement is still pending, and punishment would be determined following the court's decision. Should it be refused, the case would move to a jury trial. He faces a maximum of three years in prison, as well as fines and additional probation.