US Internal Revenue Service Hails Win Against Fraudulent Crypto Schemes

The US criminal investigation unit of the Internal Revenue Service (IRS) has, in its annual report card, hailed triumph over fraudulent tax schemes. The IRS criminal investigation outlines ten leading cases in 2023, with four involving cryptocurrency. 

The investigation division listed the Silk Road hacker alongside the OneCoin co-founder who orchestrated fraudulent tax schemes in the year. Also captured in the list is a token project founder among the high-profile cases the IRS investigators handled in 2023.  

The criminal investigation chief Jim Lee revealed on Monday, December 11, that the division took down an international-run tax scheme. He detailed that the scheme orchestrators targeted individual information.

Lee hailed the investigators’ input in discovering a crypto-based multi-level marketing scheme alongside the detection of fraud based on renewable fuel credits. The division boss indicated that the top ten featured well-known crimes and others that attracted less public attention. 

OneCoin Fraudulent Project

The top-ranked crypto-affiliated case is one involving the OneCoin co-founder. The case occupies the third spot, being a scam where millions of victims were lured into investing $4 billion into the cryptocurrency, never to launch. 

The IRS identified the OneCoin perpetrator as Karl Sebastian Greenwood. The Monday report revealed that the project co-founder is serving a 20-year sentence. Besides, the report disclosed that Greenwood should pay $300 million.  

New Hampshire Money Laundering

The fourth spot features the criminal actor hailing from New Hampshire. The man is serving an eight-year sentence for running a Bitcoin money laundering scheme. 

The man, identified as Ian Freeman, facilitated the laundering of $10M traced as proceeds from multiple online scams. The individual exchanged dollars for Bitcoin. Besides serving 96 months in prison, Freeman will face another 24 months of supervised release. Also, the court directed Freeman to restitute the victims. 

Silk Road Fraud and $3.4 Billion Forfeiture

Silk Road fraud ranked seventh, with the orchestrator sentenced. The hacker, identified as James Zhong, forfeited crypto valued over $3.4 billion as proceeds of crime stolen from the Silk Road project.

The criminal investigation boss disclosed that Zhong stole 50000 bitcoins from the darknet marketplace. The platform accepted bitcoin payment though taken down by the federal authorities in 2013.

The judge convicted Zhong to serve one year and a day in prison. The ruling directed the convict to surrender property and bitcoin valued at $3.4 during forfeiture. 

Elmaani Deceptive Filing

Lee reflected on the eighth-ranked scheme in 2023 involving crypto founder Bruno Block. The criminal actor was found guilty and sentenced to four years. 

The case involves Amir Bruno Elmaani, who unveiled a digital currency identified as Oyster Pearl. The cryptocurrency created in 2017 featured a unique design serving as the utility token for the online-based data storage platform. 

Lee revealed that Elmaani failed to file tax returns and dishonestly reported nil income in his 2018 filing. A detailed examination revealed that Elmaani had an annual expenditure exceeding $10 million towards acquiring several yachts. 

The convict spent $1.6 million in an undisclosed carbon-fiber composite firm, a hundred-thousand in an anonymous home improvement store, and acquired two homes for over $700,000. The IRS litigated the case, leading to a 48-month sentence for Elmaani and an order to settle $5.5 million restitution. 

The IRS report mirrors the scorecard disclosed by other federal regulatory agencies led by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), where each labeled 2023 a success in taking down record-breaking crypto crimes.

The duo hails their input in taking down Sam Bankman-Fried who oversaw fraudulent operations at bankrupt crypto exchange FTX till its sudden implosion in November 2022. The investigation led to his guilt finding by the jury on the seven counts of charges leveled against the FTX co-founder who is awaiting sentencing next year.

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