In a recent report released by the criminal investigation unit of the United States Internal Revenue Service (IRS), four cryptocurrency-related cases have been highlighted as the “most prominent and high-profile investigations” of 2023. According to CI Chief Jim Lee, these cases involve billions of dollars in fraud, global victims, and criminals driven solely by personal gain.
Crypto Cases Take Center Stage
Among the top crypto cases, Amir Bruno Elmaani, also known as Bruno Block, the founder of the cryptocurrency Oyster Pearl, has been sentenced to 48 months in federal prison. Elmaani faced charges related to tax offenses committed in connection with the Pearl token. He used friends and family as nominees to receive cryptocurrency proceeds, failing to file a tax return and falsely reporting no income to the IRS in 2018. The tax loss resulting from Elmaani’s conduct amounted to approximately $5.5 million.
Another case involved James Zhong, who was sentenced to one year and one day in prison for wire fraud. Zhong unlawfully obtained around 50,000 bitcoins from the Silk Road dark web marketplace in 2012, executing a complex scheme over a decade to conceal his activities. As part of the sentencing, Zhong forfeited over $3.4 billion in cryptocurrency, his 80% interest in RE&D Investments LLC, $661,900 in seized U.S. currency, and gold and silver bars and coins from his home.
Ian Freeman, a New Hampshire man, received a sentence of 96 months in prison for operating a Bitcoin money laundering scheme. Freeman exchanged over $10 million in proceeds from romance scams and internet fraud for Bitcoin, creating a business that catered to fraudsters by turning off anti-money laundering features on his Bitcoin kiosks. Freeman also failed to register his business with the Financial Crimes Enforcement Network and instructed Bitcoin customers to lie about their deposits.
Lastly, Karl Sebastian Greenwood, co-founder of the multibillion-dollar cryptocurrency scheme OneCoin, was sentenced to 20 years in prison. Greenwood, along with Ruja Ignatova, orchestrated the massive OneCoin fraud scheme, leading to millions of victims investing over $4 billion in the fraudulent cryptocurrency. Greenwood was ordered to pay approximately $300 million in forfeiture.
However, these cases underscore the IRS’s commitment to pursuing and dismantling criminal activities within the cryptocurrency space, emphasizing the importance of enforcing tax regulations and combating fraud on a global scale.
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