Originally published at: First Circuit Affirms The Conviction Of An Innocent Man | Free Keene
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Ian Freeman committed no crime, but that hasn’t stopped the corrupt court system from sentencing him to nearly a decade in prison.
On July 29, 2025, a three-judge panel of the First Circuit federal Court of Appeals unanimously upheld the criminal convictions and incarceration of libertarian Bitcoin activist Ian Freeman, who I have steadfastly maintained is an innocent man who federal officials railroaded into an 8-year prison sentence, which he is now serving.
Here are my articles about the Freeman case, which explain in detail why this man is innocent:
The Unjust Conviction of an Innocent Man by Jacob G. Hornberger
How I Came to Investigate the Ian Freeman Case by Jacob G. Hornberger
Statism Was Alive and Well in Ian Freeman’s Appellate Hearing by Jacob G Hornberger
The Court’s opinion
A person who is convicted of a crime in a U.S. District Court has the right to appeal his conviction to the federal Court of Appeals in the circuit in which the District Court is situated. To do that, he must file a Notice of Appeal. He must then file an appellate brief stating what exactly are the legal rulings that the District Judge made that void the conviction or that require the case to be sent back for a new trial. He must cite legal authority (i.e., legal opinions from similar federal cases) to support each of his points. There is something important to note about the defendant’s appellate brief: If he fails to challenge a particular ruling of the District Judge, he waives the point. That is, it is gone forever. He cannot later raise it during oral arguments or at a later time.
Freeman was convicted of the following crimes, for which he received the following prison sentences:
(1) Failing to register his bitcoin business with the federal government and conspiring to fail to register his bitcoin business with the federal government. Five years.
(2) Failure to pay income tax for various years. Five years.
(3) Money laundering.
(4) Conspiracy to launder money. Eight years.
The District Judge threw out the money-laundering conviction (number 3) before sentencing. He held that there was no evidence whatsoever to support the jury’s conviction on that count. And there wasn’t. The judge acted properly in throwing out that conviction, notwithstanding the jury’s verdict of guilty.
A “no-evidence” point to challenge a conviction can also be raised on appeal. But, again, it must be raised as a specific point in the defendant’s appellate brief. If it is not raised, it is waived (unless the Court of Appeals raises the issue on its own motion as a matter of simple justice — that is, avoiding upholding a conviction of an innocent person — that is, a person whose has been convicted of a crime when there is no evidence whatsoever that the person committed the crime).
The conspiracy conviction
It is my contention that there was no evidence whatsoever in the record that Freeman entered into a conspiracy to launder money. In other words, the same no-evidence basis on which the District Court threw out the substantive charge of laundering money applied to the conspiracy-to-launder money charge as well. Thus, I contend that Freeman’s lawyer should have challenged the conspiracy count in his appellate brief with a point stating, “There is no evidence to support the jury’s verdict of conspiracy-to-launder money and, therefore, that conviction should be set aside, just as the money-laundering conviction was set aside by the District Judge.”
But Freeman’s lawyer failed to do that. He failed to challenge on appeal the conspiracy conviction based on “no evidence” to support it, notwithstanding the fact that that was the conviction on which Freeman had received the highest prison sentence — 8 years, as compared to 5 years on the failing-to-register and income-tax evasion convictions. (All the sentences ran concurrently — that is, at the same time.)
Why was the failure to challenge the conspiracy conviction so important? Because it left the conspiracy conviction intact! In other words, once Freeman waived any challenge of the 8-year conspiracy conviction, he was effectively finished. That is, even if the Court of Appeals had voided his registration convictions and his income-tax convictions, Freeman would have still been saddled with the conspiracy conviction and the 8-year prison sentence that came with it simply because his lawyer failed to challenge it on appeal.
Except for one thing: Freeman’s attorney argued that the evidence from the money-laundering conviction was so prejudicial that it “spilled over” into the conspiracy conviction and prejudicially affected the jury’s verdict on the conspiracy charge. Therefore, he argued, the case should be sent back for a new trial without the jury hearing the evidence regarding the money-laundering conviction that was thrown out. But in its opinion, the Court of Appeals rejected that spillover argument, stating that it was entirely proper for the jury to hear the money-laundering evidence in considering the conspiracy charge.
Freeman’s attorney also made his “spillover” argument with respect to the registration and tax-evasion charges. But since the Court upheld Freeman’s convictions on those charges, the spill-over argument with respect to those charges became moot. But I think that it is highly likely that even if the Court of Appeals had knocked out either the registration charge or the tax-evasion charge or both, it would have rejected the spillover argument anyway with respect to those charges.
I contend that the “no-evidence” point was much more powerful than the spillover argument, especially since there simply was no evidence whatsoever in the record that Freeman conspired with anyone to launder money. But the important point is that Freeman’s lawyer could have raised both points. He wasn’t relegated to choosing between them.
In its opinion, the Court of Appeals did allude to Freeman’s failure to challenge the conspiracy to launder money charge on appeal. In footnote #33 on page 71 of its 81-page opinion, the Court stated, “The district court did not acquit Freeman of conspiracy to commit money laundering, a decision that Freeman has not challenged.”
In its opinion, the Court of Appeals implicitly and indirectly sustained this no-evidence point when the 3-judge panel made the following remarkable and revealing statement on page 71 of its opinion: “We agree with the district court that the undercover agent’s discussion of purported drug proceeds with Freeman was relevant to establishing whether Freeman conspired with the undercover agent to perpetrate money laundering and thus could have been admitted even if the underlying money laundering charge had never been brought.” (Emphasis added.)
Why is the italicized-bolded portion of that statement so remarkable and revealing?
Two reasons:
One, the Court of Appeals is saying that the conspiracy charge is sustained by the fact that Freeman conspired with the federal undercover agent (secret undercover IRS agent Pavel Prilotsky) to perpetrate money laundering.
Two, and more important, the law is very clear that it is impossible for a person to criminally conspire with a government undercover agent, for the obvious reason: an undercover agent cannot, as a matter of law, be a party to a criminal conspiracy.
In other words, to prove a conspiracy, the government must prove that an agreement existed between two or more people to commit the crime. In this case, the crime is money laundering. The government had to prove that Freeman entered into an agreement with another person to launder money. But under well-established federal law, that other person cannot be a government undercover agent. The other person to the agreement must be someone who was an actual party to the criminal agreement. If the supposed agreement was between Freeman and the government undercover agent, as the Court of Appeals asserts in its opinion, then there is no conspiracy as a matter of fact and as a matter of law.
The Court of Appeals cited two legal cases in support of its statement regarding Freeman’s supposed conspiracy with the government undercover agent: U.S. v George (2014) and U.S. v. Tum (2013). However, a careful review of the opinions in those two cases reveals that the conspiracies in those two cases did not involve government undercover agents but rather private parties.
Permit me to cite a couple of cases that support my point and that contradict the point made by the Court of Appeals:
1. United States v. Heater (1995): “The government must prove:(1) an agreement between two or more persons (who are not government agents)….”
2. United States v. Benavides: “One who acts as a government agent and enters into a purported conspiracy in the secret role of an informer cannot be a co-conspirator.”
Conclusion: The government failed to provide any evidence that Freeman entered into an agreement with anyone (that is, that he “conspired”) to launder money. The District Judge acted properly when he threw out the substantive money-laundering charge on that basis — that there was no evidence whatsoever that Freeman had engaged in actual money laundering. But the District Judge should have thrown out the conspiracy charge on that same basis — that the record is devoid of any evidence that Freeman entered into an agreement with anyone to launder money. (Again, under the law and contrary to what the Court of Appeals incorrectly asserted, any “agreement” to commit a crime that involves an undercover agent doesn’t count as a conspiracy.) Freeman’s lawyer should have challenged that conspiracy conviction (and 8-year prison sentence) on appeal on that ground. Even though he failed to do so, I hold that the Court of Appeals had a moral duty to raise the point on its own motion to avoid sustaining the wrongful conviction of an innocent man.
The Lonely Hearts Club
Another point needs to be raised about the Court of Appeals opinion. On page 6, the Court writes: “Across all three of his platforms, Freeman instituted another policy —one which eschewed any inquiries into why his customers were purchasing bitcoin. But it is questionable, as we’ll explain, that such a no-ask policy truly insulated Freeman from the knowledge that his services were being used by customers who were, in fact, scammers and money launderers.”
That sentence demonstrates that the Court of Appeals fell for the same “Lonely Hearts Club” argument that the government made in the trial court. But even if Freeman had some sort of moral or ethical duty to serve as a daddy for lonely widows who were letting themselves get scammed by online lovers, Freeman wasn’t charged or convicted of defrauding or scamming those little old ladies or of conspiring to do so. That point obviously goes right over the heads of the three appellate judges, just as it obviously did with the District Judge. How does Freeman’s failure to serve as a protective daddy to these little old ladies establish that he entered into a conspiracy to launder money? It doesn’t because the Lonely Hearts Club evidence still does not establish that Freeman entered into an agreement with anyone to launder money. The government’s evidence relating to the Lonely Hearts Club was always totally irrelevant to the conspiracy charge. Again, Freeman was not charged or convicted with scamming or defrauding those little old ladies who permitted themselves to get scammed after they fell in love with their online lovers.
The drug-war racket
It’s also worth pointing out that the money-laundering statutes and the money-transmission registration statutes are rooted in the federal government’s much-vaunted decades-old, ongoing, never-ending, perpetual war on drugs. At the risk of belaboring the obvious, such crackdowns have done nothing — absolutely nothing — to bring “victory” in the war on drugs. After all, if they had, President Trump and his military wouldn’t be killing people in the Caribbean for U.S. drug-law violations. Federal judges, federal prosecutors, and the DEA just continue destroying people’s lives with impunity, as their predecessors did 50 years ago and have done continuously ever since, and as they have now done with Ian Freeman and countless others. What these statists cannot acknowledge to themselves, much less to the American people, is that their beloved drug war and all of its crackdowns (including money-laundering statutes and registration regulations) are just one great big racket that keeps federal judges, federal prosecutors, DEA agents, Homeland Security agents, and military officials in high cotton with extremely generous taxpayer-funded salaries.
The registration convictions
Let’s now move on the failing-to-register his Bitcoin business with the federal government and the related conspiracy to fail-to-register his business. What we are talking about here is essentially a regulatory violation. Imagine — being sentenced to serve five years in prison for what amounts to a regulatory violation. It’s just another horror story among many of America’s conversion to a regulatory/administrative state during President Franklin Roosevelt’s administration during the 1930s. Perhaps it’s worth pointing out that another group of defendants in an unrelated case — the Uhuru defendants — who were convicted in 2024 of conspiracy to fail to register as Russian agents received probation from a different federal judge.
Reflecting FDR’s conversion of America to an administrative state, it’s also worth mentioning that law schools have long had entire courses devoted to “administrative law.” For that matter, they also have courses devoted to “income-tax law.” I don’t know but I wouldn’t be surprised if they also have courses devoted to “immigration law,” “drug-war law,” “licensure law,” “minimum-wage law,” and other features of America’s statist system that 20th-century statists foisted upon our country. It’s also worth mentioning that none of these courses was being taught in American law schools in the 19th century simply because Americans rejected statism and these statist programs for more than a century after our country was founded.
It would be difficult to find a better example of what statism has done to the mindsets of America’s lawyers and judges than the Court of Appeals opinion in Ian Freeman’s case. The opinion is absolutely incredible. It consists of more than 21,000 words, most of which deal with the arcane world of a federal regulatory agency called FinCEN, which falls within the Department of the Treasury. If you are ever having difficulty falling asleep, instead of taking a sleeping pill I recommend that you simply start reading the Court’s opinion in the Freeman case. I will guarantee that you will fall asleep very quickly.
Back in the 1990s, the federal government made it illegal to operate an unlicensed “money-transmission” business. In other words, any business that was “transmitting money” was required to register with the federal government, notwithstanding the fact that the U.S. Constitution does not delegate any power to the federal government to license or register privately owned businesses.
Bitcoin wasn’t invented until 2008. Therefore, it is obvious that Congress did not have Bitcoin in mind when it enacted its money-transmission registration law. Nonetheless, the government and the Court of Appeals say that since Congress intended to encompass the “transmission” of any type of “money” it is clear, they say, that the registration law automatically encompasses businesses selling Bitcoin.
But not so fast! For one thing, who says that Bitcoin constitutes “money” in the standard understanding of the concept of money? The government and the Court of Appeals say so. But according to this article in Forbes, a highly respected magazine that is quite renowned when it comes to financial matters, “Cryptocurrencies have been designed to serve as currencies, but they don’t yet fulfill the central functions of money.”
Indeed, if Bitcoin constitutes “money” for purposes of convicting and sentencing a person, when exactly did it become “money”? Was it “money” at the moment its invention was announced? It seems to me that that would be a hard sell.
There is another factor to consider, one that is equally important: Bitcoin isn’t “transmitted.” The Court of Appeals in the Freeman case clearly does not get that. It wrote on page 4, “When bitcoin is moved from one wallet to another….” But Bitcoin is not moved from one wallet to another. What changes is ownership. Bitcoin doesn’t move at all. It is never “transmitted.”
Thus, given difference of opinion among recognized financial experts as to whether Bitcoin really does constitute “money,” and, equally important, given that Bitcoin is never “transmitted,” do we really live in a country where someone selling Bitcoin can be convicted and sentenced for violating a “money-transmission” statute? Wouldn’t it be more just to require Congress to simply enact clarifying legislation rather than having prosecutors, judges, and even jurors guessing what Congress would have done if it had been confronted with something that reputable people say is not “money” and that clearly does not involve the “transmission” of money?
Indeed, it’s worth mentioning that FinCIN, the federal regulatory agency within the Department of Treasury, came out with its own regulation “clarifying” that the money-transmission law encompassed Bitcoin. But if it was so clear that the congressionally enacted money-transmission law already encompassed Bitcoin, why would it have been necessary for FinCIN to issue a clarifying regulation to that effect? Moreover, why shouldn’t it be Congress, not some regulatory agency, enacting such clarifying legislation? Wouldn’t that be better than guessing an innocent man into prison?
The income-tax convictions
In upholding Freeman’s income-tax convictions, the Court of Appeals said that it would rely on the evidence in the record that supports these convictions. The Court said that once the government made a prima facie case that Freeman had not paid income taxes, the burden of proof shifted to him. Really? So, we now live in a country where the accused is required to prove his innocence? It seems to me that that totally inverts the concepts of the presumption of innocence and the government’s burden to prove a person’s guilt beyond a reasonable doubt. If the enactment of the federal income tax nullified those concepts, it’s just another example of how terribly destructive that statist measure enacted in 1913 has been to our society. Remember: our American ancestors rejected income taxation and other direct taxes for more than 100 years, precisely because they understood how tyrannical such taxes could be. Freeman’s conviction, like so many other income-tax convictions, demonstrates how right our American ancestors were.
Moreover, there is an important point that needs to be emphasized: There was only one government witness who testified about Freeman’s supposed failure to pay income taxes. Thus, in considering the evidence favorable to the government, the Court accepts the witness’s testimony that points toward guilt and rejects the testimony that points toward innocence. From the same witness! It seems to me that that is one ridiculous way to convict a person of a crime.
For example, suppose a witness in a murder case stated, “I saw the defendant shoot the victim in San Diego, California, on January 10, 2024.” Then, on cross examination, the witness establishes that she was actually in San Antonio, Texas, the entire day on January 10, 2024.
Presumably, the Court of Appeals would say, “We will consider only the incriminating part of the witness’s statement. Once she stated that she saw the defendant shoot the victim in San Diego on the day in question, the burden of proof shifted to the defendant to show that the witness was actually in San Antonio that day.”
That’s ridiculous. Once the witness contradicts herself and, in fact, establishes that she was, in fact, in San Antonio on the day in question, as far as I’m concerned the prosecution is over. The contradiction constitutes reasonable doubt as a matter of law. To permit a jury to find the defendant guilty based on the first part of the witness’s statement, while requiring the defendant to prove the truthfulness of the other part of her testimony, would clearly be a grave miscarriage of justice.
But that is precisely what the Court of Appeals has done in this case. In her direct examination, the government’s IRS agent made it clear that she was simply guessing or estimating that Freeman owed income taxes. That’s the incriminating evidence that the Court of Appeals relies on to sustain the income-tax convictions. But then on cross examination, she testified as follow:
Question: Right. In fact, if he went through an itemization, detailed, and you sat down with him, quite frankly, he may owe nothing, right?
Answer: Correct.
Are we really going to convict people of income-tax evasion and force them to serve five years in prison based on testimony from an IRS agent who admits under oath that the accused “may owe nothing”?
Obviously we do, notwithstanding the fact that such testimony, by its very nature, does not establish guilt beyond a reasonable doubt.
An innocent man unjustly convicted in the federal court system
An innocent man, Ian Freeman, a libertarian and Bitcoin activist, is being made to unjustly serve eight years in a federal penitentiary. It’s just another sign of the rotten statist federal system, including the drug-war racket and the income-tax racket, under which we all have the misfortune of living — and in what we are all taught from the first grade on up in our public (i.e., government) schools to which our parents are forced to send us is a “free”and “just” society.