A crypto hedge fund manager who left the U.S., and misled U.S. tax authorities, has now been sentenced to three years in jail in Texas for tax evasion.
According to court filings, despite earning at least US$7 million from managing crypto-focused hedge fund Translunar Crypto LP from 2020 to 2022, Justin Ryan Schmidt — then a resident of Austin — didn’t report any income to U.S. tax authorities.
In March 2022, Schmidt renounced his U.S. citizenship and moved to the Cayman Islands.
At the time, Schmidt filed a false statement with the U.S. Internal Revenue Service (IRS) reporting that his net worth was just US$25,000 when it actually exceeded US$2 million. He also falsely claimed that he’d complied with his U.S. tax obligations for the preceding five years.
Additionally, in 2023, Schmidt failed to report income generated by buying and quickly reselling a house in Colorado, U.S. authorities alleged.
Earlier this year, Schmidt pleaded guilty to one count of tax evasion.
Now, a U.S. district court judge in Texas has sentenced Schmidt to 37 months in prison, followed by three years of supervised release. He was also ordered to pay approximately US$3.4 million in restitution.