Crypto Executive’s Attempt to Block IRS Access to Bank Records Rejected by Texas Federal Judge
On Wednesday, August 7, 2024, Texas Federal Judge Drew B. Tipton issued an order allowing the Internal Revenue Service to review bank records as part of a cryptocurrency fraud investigation. The records in question belonged to Rowland Marcus Andrade and his company ABTC Corp, who had filed a lawsuit seeking to block the IRS’ access.
In his order, Judge Tipton ruled that the IRS had properly notified Andrade and ABTC of summonses issued last year to four banks – Bank of America and JPMorgan Chase Bank. The summonses requested financial records from May 1, 2020 to October 31, 2020 relating to Andrade, ABTC, and other entities linked to them.
Andrade had argued that the IRS failed to meet notification requirements under the Right to Financial Privacy Act, which states that copies of subpoenas must be mailed to a customer’s “last known address.” However, Judge Tipton found that the IRS sent the summonses to an address it had on record from contacting Andrade in 2021, constituting adequate notification.
The judge also rejected Andrade’s argument that the IRS should have used the address from his most recent tax return, citing that the current investigation is unrelated to tax matters. He added that the privacy law only requires the IRS to substantially comply with notification steps, not perfectly, and sending notices to the known 2021 address satisfied this.
According to court documents, Andrade learned about two of the bank summonses indirectly from JPMorgan Chase in July 2023. He claimed the address used by the IRS was outdated and the agency failed to resend notices to correct addresses.
However, Judge Tipton said the IRS agent who issued the summonses was unaware the address may have changed since prior contact in 2021. He ruled the government made an “earnest, calculated effort” at notification as required.
Andrade had also asked the court to force the IRS to destroy or return the obtained financial records, as well as receive copies. But Judge Tipton denied this, stating the laws cited around public information requests did not apply to a federal investigation.
Andrade and ABTC first filed suit against the IRS in February seeking to quash the four bank summonses, issued as part of a bitcoin fraud probe related to Andrade’s prior role as CEO of the Nevada-based National AtenCoin Foundation. He was charged in 2020 with defrauding investors in a $5 million ICO along with former lobbyist Jack Abramoff.
By ruling that the IRS met notification standards and can access and retain the bank records, Judge Tipton’s order allows federal authorities to continue using the financial documents in their ongoing cryptocurrency fraud investigation related to Andrade’s past business dealings.
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