Early Bitcoin Investor Roger Ver Charged with Tax Fraud

Roger Ver, an early investor in Bitcoin has been charged by the United States Department of Justice on grounds of alleged tax fraud. Also known as Bitcoin Jesus, Ver was arrested in Spain over the weekend and is set to be extradited to the U.S. to stand trial. 

DOJ Charge Against Bitcoin Jesus

According to the press release, the authorities accused him of evading $50 million in taxes by concealing his Bitcoin ownership and failing to report profits from the sale of his assets. Ver, who before renouncing his U.S. citizenship in 2014 to gain citizenship in St. Kitts and Nevis owned two companies that sold computer and networking equipment. He began his personal and company Bitcoin acquisition in 2011.

Although he renounced his US citizenship, he was still required under law to file tax returns that reported capital gains from the constructive sale of his worldwide assets, including the bitcoins, and to report the fair market value of his assets. Additionally, the US law also required him to pay an “exit tax” on the capital gains. Both the companies and Ver allegedly owned roughly 131,000 bitcoins in 2014, with the companies specifically owning 73,000 of that amount. 

However, Ver allegedly hired law services to prepare and file false tax returns that undervalued the two companies, hid their BTC holdings, and did not mention Ver’s personal Bitcoin ownership. His concealed Bitcoin ownership is said to have caused the U.S. Internal Revenue Service (IRS) a loss of at least $48 million.

Furthermore, the DOJ claimed that Ver sold a considerable amount of Bitcoin holdings on crypto exchanges for about $240 million in cash in November 2017 without reporting the gains or paying taxes.

“Even though Ver was not then a U.S. citizen, he was still legally required to report to the IRS and pay tax on certain distributions such as dividends from MemoryDealers and Agilestar, which were U.S. corporations. Ver allegedly concealed from his accountant that he had received and sold MemoryDealers’ and Agilestar’s bitcoins that year. As a result, Ver’s 2017 individual income tax return did not report any gain or pay any tax related to the distribution of MemoryDealers’ and Agilestar’s bitcoins to him,” the DOJ said.