Founder of Oyster Protocol arrested on charges of tax evasion
Amir Bruno Elmaani would have earned millions of dollars with his crypto-currency, then hiding the profits from the Inland Revenue through front men and shell companies.
Amir Bruno Elmaani, founder of the now defunct Oyster Protocol, was arrested on the basis of what the US Department of Justice describes as „a multimillion dollar tax evasion mechanism“.
On 9 December, the DoJ announced Cryptosoft that it had opened an investigation against Elmaani, also known as „Bruno Block“, accused of tax evasion. The document also reports other separate civil cases filed against Elmaani by the SEC: the man was arrested the same day.
The prosecution claims that the 28-year-old earned „millions of dollars“ by selling Oyster Pearl tokens, but did not report those gains to the IRS and used shell companies to cover his tracks with the IRS:
„Elmaani earned millions of dollars from the sale of a new cryptocurrency, but he evaded tax returns to the IRS, including by filing a false tax return, managing his business and owning assets under pseudonyms and shell companies, obtaining income through people he designated, and buying gold and cash.
Elmaani’s 2017 tax return stated that he earned only $15,000 that year, while his 2018 tax return reported no income. FBI Deputy Director William Sweeney noted that despite Elmaani’s „very low income declared by Elmaani in 2018, he still managed to spend over $10 million on yacht purchases.
Authorities believe that Elmaani kept gold bars in a safe on his yacht, and that he used large sums of cash to pay for personal expenses. The DoJ also claims that he spent more than $700,000 on the purchase of two houses.
Sweeney added: „After today’s arrest, he will no longer be sailing anywhere
The prosecution claims that Elmaani began promoting his Pearl tokens in September 2018, using his digital alias Bruno Block, claiming that the tokens would power an online data storage platform called Oyster Protocol.
Elmaani then launched an ICO through a shell company not associated with its real name, revealing that it would be responsible for a large percentage of the project’s tokens.
In June 2018, Elmaani said it would retain millions of tokens as „ownership share“, and that it would have to move them between its various wallets „to avoid double taxation“. However, the Department of Justice thinks differently:
„Elmaani used friends and relatives as candidates to receive the proceeds of the cryptocurrency: then he transferred them to his own accounts“.
Despite claiming that the project had a limited supply of tokens, according to the Elmaani government Elmaani would continue to issue them and then sell them short on exchanges: some platforms decided to suspend and remove Pearl in response to Elmaani’s actions. As a result, the value of the token plummeted and investors suffered substantial losses.
In November, Cointelegraph reported that a former Microsoft employee had been sentenced to nine years in prison for stealing $10 million in digital assets from his employer and then using cryptos to hide evidence of his illegal gains. The DoJ described the trial as „the first Bitcoin case in the United States that has a tax component.