- The Criminal Investigation division of the US Internal Revenue Service has released its top ten cases of 2023
- Crypto crooks take up four spots, including the OneCoin co-founder and a Silk Road hacker from 2012
- We run down the entrants that gave crypto a bad name in 2023
Four crypto cases have featured in the Criminal Investigation division of the US Internal Revenue Service’s (IRS-CI) list of its top ten “most prominent and high-profile” cases in 2023. The IRS-CI’s list includes “international tax schemes,” “multi-level marketing schemes involving cryptocurrency,” and “one of the largest fraud schemes in history centered around renewable fuel credits.”
Of course, we’re only interested in the crypto cases, but what were they? Let’s find out who achieved this dubious honor.
Bruno Elmaani
Elmaani started promoting his Oyster Protocol project before October 2017 by seeking investors to buy the project’s Pearl (PRl) tokens, which he touted as a decentralized data storage platform. He wasn’t forthcoming with all the details about the protocol, however, later secretly generating more tokens, selling them, and pocketing the profits.
Despite generating millions in the scheme in 2017, he told the IRS that he only made $15,000 from a different business and in 2018 filed zero income despite spending over $10 million on personal items, investments, and property.
Elmaani pleaded guilty to tax evasion in April and was sentenced to four years in prison last month.
James Zhong
Back in September 2012, hacker James Zhong defrauded the Silk Road marketplace by creating a series of accounts and triggering over 140 rapid transactions to trick its payment system into releasing approximately ₿50,000 into his accounts. Zhong subsequently transferred the bitcoin into various addresses under his control, where it lay untouched for almost a decade.
Zhong was undone when he tried to rid himself of the 50,000 Bitcoin Cash tokens that came his way as a result of the 2017 hard fork. Zhong sent the coins to an unnamed exchange and sold them, which proved to be his undoing: the IRS tracked him down and Zhong was arrested in November 2021.
In April, Zhong was sentenced to a year in prison for wire fraud having already pled guilty.
Ian Freeman
Ian Freeman was one of the ‘Crypto Six’ who, according to investigators, helped operate “a large-scale multi-million-dollar virtual currency business under the guise of a religious organization receiving charitable contributions”. The libertarian activist and the co-host of the radio broadcast Free Talk Live was the only one of the six arrested in March 2022 on suspicion of helping romance scammers hide their ill-gotten gains through the cryptocurrency.
Freeman was the only one of the group to plead not guilty, but this backfired last December when he was found guilty of multiple counts of fraud. Freeman was sentenced to eight years in prison in October, much more than his cohorts got after their guilty pleas.
Whoops.
Karl Greenwood
The OneCoin saga rumbled into 2023 when its co-founder Karl Greenwood, brother of co-founder and international refugee Ruja Ignatova, was sentenced to 20 years in prison for his involvement in the $4 billion scam. He was also ordered to pay $300 million in penalties and restitution.
Greenwood pleaded guilty in December last year to operating one of the largest international fraud schemes ever perpetrated and was jailed for his role in it in April, having pleaded guilty to two of the charges leveled against him following his arrest in 2018.
Of course, the one that the IRS-CI really wants to nab is Dr Ignatova herself. But then, don’t we all.
