Yesterday, a formal accusation was unsealed, charging Roger Ver, who is a renowned Bitcoin early investor, with several crimes. According to the indictment, “Bitcoin Jesus” will be facing charges of mail fraud, filing false tax returns, and tax evasion crimes.
This weekend, in Spain, Roger Ver was arrested based on these charges, and the US government will initiate his extradition to the US to face charges on US soil.
Roger Ver was a resident of Santa Clara and owned two US corporations that primarily sold networking and general computer equipment. The two corporations, Agilestar.com Inc. and MemoryDealers.com Inc., and Roger Ver allegedly began aggressively stacking up Bitocin back in 2011. According to the allegations, Roger Ver was also an avid promoter of Bitcoins, earning him the alias “Bitcoin Jesus.”
Dissecting Roger Ver’s alleged tax fraud
It’s alleged that on February 4th, 2014, Roger got citizenship in St Kitts and Nevis and quickly renounced his US citizenship thereafter through an expatriation process. As it appears now, this allegedly was Ver’s master plan to avoid the IRS. According to the indictment, the IRS required Ver to pay tax returns according to US law, covering his capital gains from the sale of his assets, including Bitcoin.
Apparently, when he renounced his US citizenship, Ver was required to pay some tax, referred to as an “exit tax.” The exit tax should have covered all capital gains Roger Ver earned from the sale of his Bitcoins and other assets.
In perspective, it’s alleged that by Feb 2014, Roger Ver and his companies owned close to 131,000 Bitcoins; among those, his two corporations, Agilestar and MemoryDealers, accounted for nearly 73,000 Bitcoins. These Bitcoins were reportedly traded on various crypto exchange platforms at the time. Notably, as of Feb 2014, each Bitcoin traded at an average market price of $871.
In the process of expatriation, Roger Ver allegedly consulted a particular law firm to help him handle tax returns related to his expatriation. In the process, he also reportedly got a valuator for the valuation of his two companies.
Ver allegedly provided a false account of the number of Bitcoins he owned, which reportedly led to grave undervaluation of his assets, misleading the law firm and the appraiser into filing incorrect returns to the IRS.
According to the indictment, Roger Ver’s two companies still held onto approximately 70,000 Bitcoins. During that time, Ver allegedly took control of the Bitcoins and consequently sold most of them for almost $240 million in cash on various exchange platforms.
Roger Ver, although not a US citizen at the time, should have reported to the IRS his earnings from dividends and other gains from Agilestar and MemoryDealers, according to the indictment.
The IRS Criminal Investigation’s Cybercrime is already on the case. Allegedly, Ver caused an estimated loss of $48 million to the IRS.
