Amir 'Bruno Block' Elmaani, the 31-year-old Founder of the Oyster Protocol that powers Pearl (PRL) tokens, has pled guilty to allegations of tax evasion for the amount 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, 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 Founder, who was 28 years old at the time, of tax evasion. In addition, the US securities regulator 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, around October 29, 2018, the Founder secretly minted new PRL tokens for his personal gain, contrary to his pledge that the token amount was fixed.

Following this action, Elmaani 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 made use of friends and family to receive the cryptocurrencies. In addition, he 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 Oyster Protocol Management who alerted the public.

The CEO of the digital asset company in a recorded call is said to have asked Elmaani why he took additional PRL tokens “if he had already cashed out millions 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," the DOJ explained.

As a result of these actions, Elmaani has pled 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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