Amir Elmaani, also known as "Bruno Block" and the founder of the defunct cryptocurrency project Oyster Protocol, has been sentenced to up to four years in prison for tax evasion. The sentencing came after Elmaani pleaded guilty on April 6 to charges related to secretly minting and selling Pearl tokens while failing to report income taxes. This cryptocurrency venture generated substantial profits, and Elmaani acknowledged that his actions resulted in tax losses exceeding $5.5 million.
U.S. District Attorney Damian Williams expressed his thoughts on the sentencing, stating that Amir Elmaani failed to meet his tax obligations concerning cryptocurrency profits, thereby violating the trust placed in the cryptocurrency he created by investors. Elmaani initiated his cryptocurrency project in September and October of 2017, introducing a token called Pearl (PRL). He marketed this token as a means for investors to acquire data on a blockchain-based data storage platform known as the Oyster Protocol.
However, unbeknownst to the Oyster Protocol team and its investors, Elmaani clandestinely minted a substantial quantity of new PRL tokens in October 2018, which he then sold on the market for personal gain. In his plea agreement, he admitted to this surreptitious action, stating, "On or around October 29, 2018, I minted new PRL using smart contracts without telling anyone, including others involved in the Oyster Protocol project. I then sold these newly minted PRL on a digital exchange. I understand that counterparties purchasing these new PRLs may not know that I have reopened the smart contracts or that I have just significantly increased the total supply of PRL."
Despite his substantial earnings from the cryptocurrency scheme, Elmaani falsely claimed an income of only $15,000 from his patented design business in his 2017 tax return. Furthermore, he reported zero income to tax authorities in 2018. Court proceedings revealed that in 2018, Elmaani spent over $10 million on multiple yachts, approximately $1.6 million at a carbon fiber composites company, hundreds of thousands of dollars at home improvement stores, and acquired two homes, with one purchased through a shell company and the other in the names of two of his associates. He also engaged in heavy trading of precious metals and stored gold bars in a safe on one of his yachts.
Prosecutors found that Elmaani had consistently failed to report or pay taxes on any of his cryptocurrency gains. He allegedly utilized friends and family as nominees to receive cryptocurrency profits and transfer them to him or convert them into U.S. dollars through his accounts. In addition to his four-year prison sentence, Elmaani has been sentenced to one year of supervised release and has been ordered to pay $5.5 million in restitution.
