The Oyster Pearl founder allegedly made millions of dollars through the sale of his cryptocurrency but failed to report it to the IRS
The US Department of Justice (DOJ) announced in a press release yesterday they had arrested Amir Bruno Elmaani, also known as Bruno Block, in Martinsburg, West Virginia. Elmaani, 28, founded the Oyster Pearl cryptocurrency and has been charged with tax evasion.
The indictment, unsealed yesterday in Manhattan federal court, alleges that in September and October of 2017, Elmaani announced he would develop Oyster Protocol – an online data-storage platform. He then promoted Pearl tokens, his new cryptocurrency, online before selling them to the public through an initial coin offering while keeping a founder’s share for himself.
Throughout all this, he hid his real identity from collaborators and employees under his pseudonym Bruno Block, and owned and controlled Oyster Protocol through a shell company.
Acting Manhattan US Attorney Audrey Strauss explained, “As alleged, Amir Bruno Elmaani purported to establish a high-tech method of financing a high-tech business, but the underlying scheme was old-fashioned fraud and tax evasion. Elmaani allegedly generated millions by soliciting investor money through his own cryptocurrency, adding to the purportedly fixed number of tokens and converting them to other cryptocurrencies, and failing to report or pay tax on any of the proceeds.”
In October 2018, Elmaani minted new tokens for himself, despite previously claiming the token supply was fixed, and converted them to other cryptocurrencies through an online exchange. His actions caused Pearl token trading to be halted on that exchange and a substantial drop in the price of tokens held by investors. Also, the primary exchange for Pearl token trading subsequently de-listed them.
In his 2017 tax return, Elmaani falsely claimed his income for that year had been just $15,000 from a patent design business. Despite not filing a return or reporting any income to the IRS in 2018, he spent more than $10 million on yachts, $1.6 million at a carbon fibre composite company, more than $700,000 on two houses (titled in the names of a shell company and two of his associates respectively) and several hundred thousand on home improvement.
IRS Special Agent-in-Charge Kelly R. Jackson added, “Using cryptocurrency as a means to defraud and evade taxes will not stop our agents from doing what we do best – following the money.”
Elmaani is charged with two counts of tax evasion, which carry a maximum sentence of five years in prison each, and was due to appear before a magistrate yesterday. The Securities and Exchange Commission also filed civil charges against Elmaani in a separate civil action.