The US Internal Revenue Service (IRS) has declared war on crypto crooks after revealing non-tax fraud hit $4.4bn in 2019.
The IRS Criminal Investigation division also revealed tax fraud totalling $1.8bn in its 100th annual report, released today.
The report also revealed that 1,726 warrants were executed and 1.24 petabytes of digital data were seized over 2019.
Deputy Chief Jim Lee said: “Cryptocurrencies are undermining the financial and tax system.
“Companies pay employees in cryptocurrency or receive crypto for goods/services. They do not pay taxes and entities shift income to offshore exchanges with no reporting requirements, utilising exchanges with little to no AML (anti-money laundering) practices.
“Understanding the advancements in this area and staying on top of the criminal methodologies is our bread and butter.
“We will continue to support cases in this area while looking to use our limited resources to positively affect tax administration in the most impactful way possible.”
#IRS Criminal Investigation highlights significant successes in its Fiscal Year 2019 Annual Report. https://t.co/7ujgEORvxC pic.twitter.com/Z0EuSYDtCz
— IRSnews (@IRSnews) December 5, 2019
The IRS report highlights a case in Westwood, California, where Kunal Kalra, 25, agreed to plead guilty to federal criminal charges for owning and operating an unlicensed money transmitting business.
He exchanged up to $25 million in cash and virtual currency for individuals, including darknet drug dealers and other criminals, some of whom used his Bitcoin ATM kiosk.
The document states: “A key element to the success of the case was the technical expertise and ability of the IRS Criminal Investigation Special Agents to seize, image, and analyse the Bitcoin ATM that was instrumental in executing this crime.
“IRS-CI special agents developed procedures enabling the forensic seizure and processing of log files and cryptocurrencies that allowed investigators to ‘follow the virtual money trail’, which led to other valuable electronic crimes intelligence regarding use of cryptocurrencies to commit crimes.”
To counter cryptocrime, the National Criminal Investigation Training Academy (NCITA) is working to improve professional education courses for special agents and professional staff with an emphasis on emerging trends such as cybercrime and cryptocurrencies.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.