Translunar Founder Sentenced for Tax Evasion: Concealing $7 Million in Income Leads to 37-Month Prison Term

July 29th, according to Bloomberg, Justin Ryan Schmidt, founder of crypto investment fund Translunar Crypto LP, has been sentenced to 37 months in prison by a U.S. court for tax evasion. He was accused of underreporting income between 2020 and 2022, declaring less than $5,000, while prosecutors claim he actually earned over $7 million through his fund business between 2019 and 2022. The case number is US v. Schmidt, 26-cr-94, heard in the U.S. District Court for the Western District of Texas, Austin Division. Schmidt founded Translunar in 2017, primarily investing in blockchain startups, with funds mainly from investors in Austin, Texas, and Aspen, Colorado. The IRS Criminal Investigation Division arrested him on February 23, 2026, and he has been in custody since. Assistant Attorney General Colin M. McDonald stated that renouncing U.S. citizenship does not exempt one from U.S. legal sanctions. Schmidt defrauded the U.S. tax system by concealing millions of dollars in income and assets and submitting false tax filings. Prosecutors stated in sentencing documents that after his arrest, Schmidt claimed to the probation department that he was single with a net worth of negative $1.1 million. However, the actual situation showed he was married, his spouse was a British citizen residing in the Cayman Islands, and Schmidt admitted his net worth reached at least $5.8 million. In addition to the 37-month prison sentence, U.S. District Judge Robert Pitman also ordered Schmidt to pay approximately $3.4 million in restitution.