Dillsburg-area man charged with leaving $12M from NFT sales off taxes
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A Dillsburg-area man is prepared to admit he lied on his taxes by failing to report more than $12 million from the sales of non-fungible tokens and cryptocurrencies over two years.
Waylon Wilcox, 45, allegedly agreed last week to plead guilty to two federal charges following an IRS investigation into his taxes, according to court documents and a news release.
The release indicated he’s from the Dillsburg area, while court documents allege the crimes occurred in Cumberland County.
Wilcox faces two federal felony counts of making and subscribing false individual income tax returns as part of the agreement to waive indictment by a grand jury and go forward with a plea, according to filings by the U.S. Attorney’s Office in Harrisburg on Friday.
In this case, Wilcox allegedly bought up NFTs from a digital art collection called CryptoPunks — essentially, little pixelated commemorative character faces, federal charging documents show.
He then sold 62 Punks for $7.4 million through a crypto software platform in 2021.
Another 35 Punks were sold by him for nearly $4.9 million in 2022, investigators allege.
Wilcox allegedly didn’t report the sales on his taxes in spite of what investigators said is a requirement for taxpayers to report proceeds, along with gains or losses, from NFT sales, court documents show.
As a result, investigators allege that Wilcox filed false tax returns and underreported his 2021 income by $8.5 million. By doing that, they said, he reduced the income taxes he owed by $2.2 million that year.
His 2022 income was underreported by nearly $4.6 million, which reduced the taxes he owed for that year by nearly $1.1 million.
But Wilcox apparently underreported more than what the two counts in his case cover.
The plea agreement document includes a list of underreported income and owed taxes from 2018 through 2023.
The underreported income amount from that period, including the NFT sales, added up to nearly $13.3 million. The resulting owed taxes amounted to $3.3 million, the document shows.
Prosecutors noted Wilcox paid the IRS the owed amount as restitution before the agreement was reached.
The maximum sentence for a conviction on the two counts in Wilcox’s case calls for six years in federal prison and $500,000 in fines, court documents show.
Federal Judge Malachy Mannion scheduled a hearing for April 9 to consider Wilcox’s plea agreement, court documents show.
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— Reach Aimee Ambrose at aambrose@yorkdispatch.com.