“Bitcoin Jesus” Charged with $48M Tax Evasion by the U.S. Department of Justice, Arrested in Spain

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As a crypto investor who has closely followed the developments in the cryptocurrency world, I find the recent indictment of Roger Ver on charges of mail fraud, tax evasion, and filing false tax returns to be a concerning turn of events. Ver’s alleged actions surrounding his expatriation in 2014 and subsequent handling of Bitcoin holdings are particularly troubling for the community.

Roger Ver, a pioneering Bitcoin investor and influential figure within the cryptocurrency community, faces allegations of mail fraud, tax evasion, and submitting false tax returns. Known as “Bitcoin Jesus” for his fervent advocacy of digital currency, Ver was apprehended in Spain last weekend following U.S. accusations. The American authorities are pursuing his extradition to bring him to trial.

As a researcher delving into this case, I discovered that Ver, who used to live in Santa Clara, California, was the proprietor of two businesses: MemoryDealers.com Inc. and Agilestar.com Inc. These companies focused on retailing computer and networking equipment. Around 2011, I found evidence suggesting that Ver started purchasing bitcoins for his personal use and for the benefit of these corporations, gradually accumulating a substantial quantity of this digital currency over the years.

The accusations against Ver arise from his reported actions involving his expatriation in 2014. On February 4 that year, it is claimed that Ver acquired citizenship in St. Kitts and Nevis and subsequently gave up his American citizenship. This procedure mandated by U.S. law necessitated Ver to submit tax returns reporting capital gains from the deemed sale of all his assets, including his Bitcoin holdings, and pay an “exit tax” on those gains.

During his departure from the country, Ver and his businesses are believed to have owned roughly 131,000 bitcoins. About 73,000 of these bitcoins were under the possession of MemoryDealers and Agilestar. The value of each bitcoin on major exchanges was approximately $871 at that time.

The indictment alleges that Ver hired a law firm to assist with his expatriation and prepare the necessary tax returns, as well as an appraiser to value his two companies. However, Ver allegedly provided false or misleading information to both the law firm and the appraiser, concealing the true number of bitcoins he and his companies owned. Consequently, the law firm allegedly prepared and filed false tax returns that substantially undervalued MemoryDealers, Agilestar, and their Bitcoin holdings, while also failing to report Ver’s personal bitcoin ownership.

Around June 2017, Ver’s businesses owned around 70,000 bitcoins. It is claimed that Ver obtained control over these bitcoins by the end of that year. Subsequently, according to the U.S. Department of Justice, in November 2017, he sold a significant portion of them – tens of thousands – on cryptocurrency exchanges, raking in approximately $240 million in cash proceeds.

As a researcher examining this case, I’ve found that even after losing his U.S. citizenship, Ver remained bound by legal obligations to report and pay taxes on certain distributions from his American corporations, MemoryDealers and Agilestar, according to the Department of Justice’s press release. These distributions included dividends. However, the indictment alleges that Ver failed to disclose to his accountant that he had received and sold the companies’ bitcoins in 2017. Consequently, his individual income tax return for that year did not reflect any gains or taxes paid on the distribution of these digital currencies.

As a researcher examining the case of Ver’s alleged actions, I have discovered that the estimated tax revenue loss for the Internal Revenue Service (IRS) is approximately $48 million based on available information.

Acting Deputy Attorney General Stuart M. Goldberg of the Tax Division at the Justice Department and U.S. Attorney Martin Estrada from the Central District of California made the public announcement of the indictment. The ongoing investigation into this case is being led by the cybercrimes unit of the IRS Criminal Investigation, with the prosecution being managed by Assistant Chief Matthew J. Kluge and Trial Attorney Peter J. Anthony from the Justice Department’s Tax Division, as well as Assistant U.S. Attorney James. C. Hughes for the Central District of California.

A crucial point to remember is that an indictment represents just an accusation; every defendant, including Roger Ver, is assumed to be innocent until proven guilty beyond any reasonable doubt in a court of law. The proceedings against Roger Ver are still underway, and the final judgment will be reached through the legal system’s due process.

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2024-04-30 23:36