American-born cryptocurrency investor Roger Ver, known as “Bitcoin Jesus,” has been charged with defrauding the US government of $48 million in taxes, according to the Justice Department. Ver, who renounced his US citizenship in 2014 and became a national of St. Kitts and Nevis, was arrested in Spain over the weekend. The 45-year-old millionaire bitcoin investor now faces charges of mail fraud and filing false tax returns.
Ver’s arrest came as a surprise to his lawyer, Bryan Skarlatos, who expressed disappointment and stated that Ver had relied on tax professionals to ensure compliance with his US tax obligations. Skarlatos added that they look forward to establishing Ver’s innocence in court, if necessary.
Coincidentally, on the same day as Ver’s indictment, Changpeng Zhao, the founder of cryptocurrency exchange Binance, was sentenced to four months in prison after pleading guilty to money laundering last year. Ver had previously defended Charlie Shrem, the co-founder of BitInstant, who was convicted and sentenced to two years in prison for money laundering.
According to US law, individuals who renounce their US citizenship must file tax returns reporting capital gains from the sale of their assets, including bitcoin. Ver was also required to pay an “exit tax” on the capital gains. Prosecutors allege that Ver renounced his citizenship for tax purposes. They claim that Ver provided false or misleading information about the amount of cryptocurrency he owned to a law firm hired to prepare his expatriation-related tax returns and appraisal.
The indictment further alleges that Ver’s law firm undervalued his companies, MemoryDealers.com and Agilestar.com, as well as the bitcoins they held. It also states that the returns failed to disclose Ver’s personal ownership of the digital currency. In 2017, Ver sold the 70,000 bitcoins owned by the two companies for approximately $240 million but failed to pay the taxes owed on the distributions from these US companies.
Prosecutors estimate that the Internal Revenue Service was deprived of $48 million in taxes between 2014 and 2017 due to Ver’s actions.
