According to a press release from the U.S. Department of Justice (DOJ), on Thursday a U.S. district judge entered an order authorizing the Internal Revenue Service (IRS) to issue a "John Doe" summons (a summons to obtain information about possible violations by individuals whose identities are unknown) requiring a New York-based bank to produce information about U.S. taxpayers who may have failed to report to the IRS and pay taxes on cryptocurrency transactions. Specifically, the summons seeks information about customers of SFOX, a cryptocurrency prime broker, which used banking services that the bank offered to SFOX customers engaged in cryptocurrency transactions. Deputy Assistant Attorney General David A. Hubbert said: "Taxpayers who transact with cryptocurrency should understand that income and gains from cryptocurrency transactions are taxable. The information sought by the summons approved today will help to ensure that cryptocurrency owners are following the tax laws."
According to another DOJ press release, James Wolfgramm and two of his businesses, Bitex LLC (Bitex) and Ohana Capital Financial Inc. (OCF), were recently charged by a federal grand jury with seven felony counts in connection with multiple crypto financial fraud schemes. In one of these alleged schemes, Wolfgramm and Bitex collected nearly $1.7 million from two victims by purporting to sell a high-powered cryptocurrency mining machine that did not exist. In another alleged scheme, Wolfgramm and OCF marketed the business with the motto "Banking the Unbankable" and purported to offer financial services to entities ineligible for traditional bank accounts. OCF allegedly received millions of dollars from customers who falsely believed their money would be kept on deposit until the customers directed the release of their funds. Instead, according to the DOJ press release, Wolfgramm and OCF spent these funds on unrelated business expenses. In the final alleged scheme, Wolfgramm fraudulently agreed to purchase the Sports City complex and land in Draper, Utah, for $15 million. According to the indictment, Wolfgramm took possession of the property and collected about $160,000 in customer billing without ever making any of the promised payments to the seller on the sales contract.
For more information, please refer to the following links:
- IRS Obtains Court Order Authorizing Summons For Records Relating To U.S. Taxpayers Who Failed To Report And Pay Taxes On Cryptocurrency Transactions
- Spanish Fork Man and His Two Businesses Charged with Wire Fraud and Money Laundering Offenses
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