Amir “Bruno Block” Elmaani, the
31-year-old Founder of the Oyster Protocol that powers Pearl (PRL) tokens, has
pleaded guilty to allegations of tax evasion to the tune of $5.5 million. US
prosecutors disclosed this on Thursday, noting that the crypto entrepreneur has agreed to pay restitution
of at least the same amount.
Elmaani, who was arraigned
before US District Judge Collen McMahon, also admitted that he secretly minted
and sold PRL tokens, causing the price of the token to drop sharply, Damian
Williams, the US Attorney for the Southern District of New York said.
Cryptocurrency founder “Bruno Block” pleads guilty to tax crimeshttps://t.co/DUPqaYZOup
— US Attorney SDNY (@SDNYnews) April 6, 2023
Elmaani was first charged to court in December 2020 after he was arrested in Martinsburg, West Virginia. An indictment unsealed in a Manhattan federal court accused the then 28-year-old Founder of tax evasion. The US securities regulator at the time also filed civil charges against the cryptocurrency founder.
“Bruno Blocks” Secretly Mints PRL Tokens
According to Williams, Elmaani
between September and October 2017 started promoting the Oyster Protocol and PRL
tokens almost exclusively under his pseudonym, “Bruno Block.” However, in
breach of his investors’ trust, the Founder in or about October 29, 2018, secretly
minted new PRL tokens for his personal gain, contrary to his pledge that the
token amount was fixed.
Following his action, the
Founder converted the newly minted PRL tokens to other types of digital assets
and sold them at an online exchange. This development caused PRL tokens to be
halted and subsequently delisted on the primary exchange they were traded on.
In order to hide his proceeds, the
Oyster Protocol Founder is said to have used friends and family to receive the
cryptocurrencies. He also transferred funds to a bank account registered in his name.
“Taxes are Pretty Nasty”
According to the Department of
Justice’s (DOJ) statement, Elmaani’s actions were discovered by the Oyster Protocol Management who alerted the public.
The CEO of the digital asset
company in a recorded call is also said to have asked Elmaani why he took
additional PRL tokens “if he had already cashed out million of dollars’ worth
of Pearl tokens in the past.” To this, Elmaani responded that “taxes are pretty
nasty,” the statement said.
Furthermore, US prosecutors said
the Founder filed a false tax return in 2017, saying he made only $15,000 from
a “patent design” business. In the following year, he reported no income
despite spending at least $12.3 million.
“Nevertheless, ELMAANI spent, in
2018, over $10 million for the purchase of multiple yachts, $1.6 million at a
carbon-fiber composite company, hundreds of thousands of dollars at a home
improvement store, and over $700,000 for the purchase of two homes, one of
which was titled in the name of a shell company and the other in the name of
two of his associates,” DOJ explained.
As a result of these actions,
Elmaani has pleaded guilty to charges of filing a false tax return in 2017 and
failing to file a tax return in 2018, prosecutors said. While the Founder faces
up to three years in prison for the first charge, he could get as much as 12
months in confinement for the second offense.
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This article was written by Solomon Oladipupo at www.financemagnates.com.
