South Florida Man Hacks And Sells Online Accounts, Pleads Guilty To Tax Evasion
Ethan Thomas Trainor Pleads Guilty To Tax Evasion
FORT LAUDERDALE, FL – Boca Post (BocaPost.com) — Ethan Thomas Trainor, accused of hacking and selling hacked online accounts, has pled guilty to attempted tax evasion.
Trainor used sophisticated online techniques to conceal from the IRS over $1 million in cryptocurrency he earned through illegal dark web transactions.
During a hearing in Ft. Lauderdale before U.S. District Judge Rodney Smith, Trainor admitted that he used cryptocurrency to buy and sell hacked online account logins (usernames and passwords) on dark web marketplaces.
The hacked logins were connected to paid movie and music streaming services, pornography websites, educational websites, ride-share service accounts, and other online services. According to the information filed, the accounts Trainor was dealing with include Netflix, Uber, Spotify, sports websites, learning websites, and pornography websites.
Taxpayers who transact business in cryptocurrency must report their virtual earnings to the IRS and pay federal taxes on that income. From 2014 to 2017, Trainor earned over $1 million in cryptocurrency through dark web transactions and tried to avoid paying taxes on it by using services and techniques designed to conceal that the money was his.
For example, Trainor ran his virtual currency transactions through “mixers,” online services that pool together (mix) the cryptocurrency transactions of different users, then distribute “clean” cryptocurrency to the users’ virtual wallets. The mixing makes it harder, but not impossible, to determine the identity of those dealing in the cryptocurrency. Trainor is scheduled to be sentenced in December. He faces up to five years in federal prison.