The Criminal Investigation Division of the Internal Revenue Service (IRS) recently disclosed its annual list of the ten most noteworthy cases for 2023, with four cases implicating cryptocurrency. These cases have brought to light diverse instances of fraud, money laundering, and other financial criminal activities.
OneCoin Co-Founder Sentenced to 20 Years for False Cryptocurrency Asset Sales
Karl Sebastian Greenwood, co-founder of OneCoin, was sentenced to a 20-year prison term in September of this year and fined up to $300 million for his involvement in false advertising and the sale of fraudulent cryptocurrency assets. OneCoin, headquartered in the Bulgarian capital, Sofia, has been operational since 2014. Utilizing an extensive global multi-level marketing network, the company widely promoted and sold fictitious digital assets to millions of investors, with the total amount involved reaching $4 billion.
Greenwood, in collaboration with co-founder and "Crypto Queen" Ruja Ignatova, masterminded and executed an extensive fraudulent scheme. His actions included false advertising, deceptive sales practices, and the misappropriation of investors' funds, resulting in substantial financial losses for millions of individuals.
New Hampshire Man Sentenced to 8 Years for Bitcoin Money Laundering Scheme
In October 2023, Ian Freeman was sentenced to 96 months in prison and fined $40,000 for laundering over $10 million in fraudulent proceeds by converting US dollars into Bitcoin. Freeman established a business that engaged in financial fraud using fictitious church accounts. He encouraged victims to transfer funds to financial institutions under the pretext of making donations to the church. His actions resulted in millions of dollars in losses, as he engaged in tax evasion and concealed his income.
Silk Road Bitcoin Illegal Activity Leads to One-Year Imprisonment
Zhong Jie was sentenced to one year and one day in prison for illegally obtaining 50,000 bitcoins from the Silk Road dark web market in 2012. Zhong executed complex operations to steal the bitcoins, concealing his activities by transferring them to various addresses, with a total value of $3.4 billion. The court ordered the confiscation of all his bitcoins and other assets.
Oyster Pearl Founder Sentenced to 4 Years for Tax Evasion
Amir Bruno Elmaani, also known as Bruno Block, the founder of cryptocurrency Oyster Pearl, received a 48-month federal prison sentence and was compelled to pay over $5.5 million in restitution for tax evasion related to Pearl tokens. Elmaani failed to report income and evaded taxes, resulting in a $5.5 million loss in tax revenue.
These four cases underscore the complexity and potential risks in the cryptocurrency domain while highlighting the IRS's determination to combat financial crimes. The verdicts not only serve as a deterrent to related criminal activities but also provide robust support for protecting investors and the public from the threat of fraudulent activities.
