Amir Bruno Elmaani, the 31-year-old mastermind behind the now-defunct cryptocurrency venture known as Oyster Protocol, has been dealt a significant blow in the form of a maximum four-year prison sentence for his involvement in tax evasion. This announcement comes from the United States Attorney’s Office, as of October 31.
Operating under the pseudonym “Bruno Block,” Elmaani had already pleaded guilty on April 6 for his role in clandestinely generating and selling Pearl tokens while sidestepping his income tax obligations on substantial profits stemming from the Oyster Protocol enterprise.
In his confession, Elmaani acknowledged that his actions resulted in tax losses amounting to over $5.5 million. District Attorney Damian Williams emphasized, “Amir Elmaani violated the duty he owed to pay taxes on millions of dollars of cryptocurrency profits, and he also violated the trust of investors in the cryptocurrency he founded.”
Elmaani’s scheme began in September and October of 2017 when he actively promoted a cryptocurrency named Pearl (PRL). This digital asset was marketed as a means for investors to acquire data on a blockchain-based data storage platform, the Oyster Protocol.
However, Elmaani executed his deceptive maneuvering under the radar of the Oyster Protocol’s team and unsuspecting investors. In October 2018, he covertly minted a large volume of new PRL tokens and released them into the market, thereby reaping personal financial gains. Elmaani openly admitted, “On or about October 29, 2018, I used the smart contract to mint new PRL, without telling anyone, including others who worked on the Oyster Protocol project. I then sold these newly minted PRL on a digital trading platform.”
What’s more, he acknowledged, “I was aware that the counterparties who were buying these newly-minted PRL likely were not aware of my reopening of the smart contract and did not know that I had just substantially increased the total supply of PRL.“
Despite accumulating millions of dollars through his exit strategy, Elmaani filed a tax return in 2017, falsely claiming to have earned a meager $15,000 from a patent design business. In 2018, he reported zero income to tax authorities. During this time, Elmaani lavishly spent over $10 million on multiple yachts, funneled $1.6 million into a carbon-fiber composite company, and shelled out hundreds of thousands of dollars at home improvement stores, in addition to over $700,000 for two homes.
One of the homes was purchased through a shell company, while the other was registered in the names of two of Elmaani’s associates. He was also heavily involved in the trading of precious metals and even stashed gold bars in a secure safe on one of his yachts.
The Department of Justice exposed his elaborate deception, stating, “In truth, Elmaani did not report or pay tax on any of his cryptocurrency proceeds. At various points, Elmaani used friends and family as nominees to receive cryptocurrency proceeds and transfer them or U.S. currency to his own accounts.”
In addition to his four-year prison sentence, Elmaani will serve one year of supervised release and is obliged to make restitution of $5.5 million.