LOS ANGELES – A federal grand jury has indicted an early bitcoin investor and promoter known as “Bitcoin Jesus” on fraud and criminal tax charges.
According to the Justice Department, Roger Keith Ver, 45, a former California resident whose most recent residence was in Tokyo, Japan, was arrested over the weekend in Spain based on the U.S. criminal charges. The United States will seek Ver’s extradition to stand trial in the United States, DoJ said.
Ver is charged with three counts of mail fraud, two counts of tax evasion, and three counts of subscription to a false tax return.
According to the eight-count indictment, Ver owned MemoryDealers.com Inc. and Agilestar.com Inc., two companies that sold computer and networking equipment. Starting in 2011, Ver allegedly began acquiring bitcoins for himself and his companies. He also allegedly avidly promoted bitcoins, even obtaining the moniker “Bitcoin Jesus.” DoJ explained.
Renounced Citizenship
“On February 4, 2014, Ver allegedly obtained citizenship in St. Kitts and Nevis and shortly thereafter renounced his U.S. citizenship in a process known as expatriation. As a result of his expatriation, Ver allegedly was required under U.S. law to file tax returns that reported capital gains from the constructive sale of his world-wide assets, including the bitcoins, and to report the fair market value of his assets.
He was also allegedly required to pay a tax – referred to as an ‘exit tax’ – on those capital gains, the Justice Department said.
Additional Allegations
“By February 4, 2014, Ver and his companies allegedly owned approximately 131,000 bitcoins that traded on several large exchanges for around $871 each. MemoryDealers and Agilestar allegedly held approximately 73,000 of those bitcoins,” DoJ said. “Ver allegedly hired a law firm to assist him with his expatriation and to prepare his expatriation-related tax returns. Ver also allegedly hired an appraiser to value his two companies. Ver allegedly provided or caused to be provided false or misleading information to the law firm and appraiser that concealed the true number of bitcoins he and his companies owned.
“As a result, the law firm allegedly prepared and filed false tax returns that substantially undervalued the two companies and their 73,000 bitcoins and did not report that Ver owned any bitcoins personally,” DoJ added.
The indictment further alleges that by June 2017, Ver’s two companies continued to own approximately 70,000 bitcoins. Around that time, Ver allegedly took possession of those bitcoins and in November 2017 sold tens of thousands of them on cryptocurrency exchanges for approximately $240 million in cash, DoJ said.
Further Lack of Reporting
“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,” DoJ said.
In total, Ver is alleged to have caused a loss to the IRS of at least $48 million, DoJ said.
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