U.S. Government Opposes Crypto Executive’s Bid to Halt IRS Access to Bank Records
On Thursday, October 10, 2024, the U.S. government filed a brief in the U.S. District Court for the Southern District of Texas, asserting that a cryptocurrency executive charged in a 2020 bitcoin fraud investigation cannot prevent the Internal Revenue Service (IRS) from using financial information obtained through summonses while he appeals the demands in the Fifth Circuit.
The case centers around Rowland Marcus Andrade and his company, ABTC Corp., who are challenging an August 7 court order that allows the IRS to review their sequestered bank records. In its Thursday brief, the federal government contended that Andrade and ABTC have not demonstrated a valid reason to pause the IRS’s access to these records during their appeal process.
The government’s argument highlighted that Andrade and ABTC’s claim for a stay and injunction is based on the assertion that the IRS is using “fruit from the poisonous trees” of contested summonses. However, the government emphasized that to secure a pause under Federal Rule of Appellate Procedure 8, Andrade and ABTC must prove a likelihood of success on appeal and satisfy additional criteria, none of which they adequately addressed in their September request.
“They actually have failed to even acknowledge or address them,” the government’s brief stated, criticizing Andrade and ABTC for merely expressing dissatisfaction with the court’s August ruling without providing substantial legal arguments for their request.
The legal dispute began in February 2024 when Andrade and ABTC filed a lawsuit to quash four IRS summonses directed at Bank of America and JPMorgan Chase Bank. Andrade argued that the IRS had not properly notified him or his company, as required by the Right to Financial Privacy Act, which mandates that a copy of any subpoena for financial records must be sent to the customer’s last known address.
In May, the Texas court deemed Andrade’s request to quash the summonses moot, indicating that the IRS had already obtained the records in question. In August, the court ruled that the IRS had appropriately notified Andrade and ABTC regarding the third-party summonses aimed at ensuring compliance with the Bank Secrecy Act. The court rejected Andrade’s claims that these summonses violated any financial privacy laws.
Following the August ruling, Andrade and ABTC appealed to the Fifth Circuit, requesting that the lower court block the IRS from accessing their bank records until the appellate court issues a decision. They asserted that there is “100% certainty” that the August order would be overturned, claiming the district court misinterpreted the relationship between the provisions of the Bank Secrecy Act and the Right to Financial Privacy Act.
In its recent brief, the government pointed out that Andrade and ABTC have consistently lost on all issues related to their privacy law claims and have not succeeded in convincing the court to reconsider its decisions or grant them any form of relief.
Andrade previously served as an executive at the Nevada-based National AtenCoin Foundation and was charged with involvement in a $5 million initial coin offering fraud alongside former political lobbyist Jack Abramoff. While Abramoff settled with the U.S. Securities and Exchange Commission (SEC) and pleaded guilty to related criminal charges, Andrade has pleaded not guilty and is engaged in a separate lawsuit against the SEC concerning allegations of federal law violations in connection with the initial coin offering. In January 2021, a California federal judge ruled against Andrade, denying his motion to dismiss the SEC’s civil enforcement action.
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