Yesterday, an indictment was unsealed that charges Roger Ver, an early Bitcoin investor, with several criminal offenses including mail fraud, tax evasion, and filing false tax returns. Ver, formerly of Santa Clara, California, was arrested in Spain over the weekend and the United States plans to seek his extradition for trial.
The indictment details that Ver owned MemoryDealers.com Inc. and Agilestar.com Inc., companies involved in selling computer and networking equipment. It is alleged that starting in 2011, Ver began accumulating bitcoins and heavily promoting them, earning the nickname “Bitcoin Jesus.” He is said to have obtained St. Kitts and Nevis citizenship on February 4, 2014, and subsequently renounced his U.S. citizenship. U.S. laws required Ver to file tax returns accounting for capital gains from his worldwide assets, including bitcoins, and to pay an exit tax on these gains.
At the time of his expatriation, Ver and his companies purportedly possessed about 131,000 bitcoins, valued at $871 each, with MemoryDealers and Agilestar holding around 73,000 bitcoins. Allegations suggest that Ver hired a law firm and an appraiser to assist with his expatriation and tax filings, providing them with misleading information that led to the underreporting of assets and filing of false tax returns.
By June 2017, it is claimed that Ver’s companies still held about 70,000 bitcoins. Ver allegedly took control of these bitcoins and sold a significant amount in November 2017 for roughly $240 million. Despite no longer being a U.S. citizen, Ver was still required to report income from U.S. corporate dividends and pay taxes on them. The indictment accuses Ver of hiding these transactions from his accountant, resulting in an unreported income and unpaid taxes on his 2017 tax returns.
The actions described in the indictment are said to have cost the IRS at least $48 million in lost taxes. The announcement of the charges was made by Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Martin Estrada for the Central District of California.