The U.S. Department of Justice (DOJ) recently announced that an early Bitcoin investor has admitted to “submitting tax returns that falsely reported his cryptocurrency earnings.” Texas resident Frank Richard Ahlgren III admitted to underreporting the capital gains he made from the sale of $3.7 million worth of Bitcoin. According to court documents, Ahlgren purchased 1,366 Bitcoin in 2015 for less than $500 per coin. In October 2017, he sold 640 Bitcoin for approximately $3.7 million and used the proceeds to buy a home in Park City, Utah. However, Ahlgren’s 2017 tax return falsely inflated his cost basis for purchasing Bitcoin, resulting in underreporting capital gains. Additionally, he did not report $650,000 in Bitcoin sales from 2018 and 2019. The DOJ stated, “In total, Ahlgren caused a tax loss to the United States of over $550,000.” Ahlgren will be sentenced at a later date. He faces a maximum of three years in prison, along with a period of supervised release, restitution, and fines. “A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors,” the DOJ explained. (Bitcoin.com)