An American-born cryptocurrency investor dubbed “Bitcoin Jesus” was charged with cheating Uncle Sam out of $48 million taxes, the Justice Department said.
Roger Ver, a millionaire bitcoin investor from California who renounced his US citizenship in 2014 and became a national of St. Kitts and Nevis, was arrested in Spain over the weekend, according to DOJ officials.
Ver, who had once said money laundering should not be considered a crime, was charged with mail fraud and filing false tax returns.
The US will seek to extradite the 45-year-old Ver after the indictment was filed in Los Angeles federal court on Tuesday.
Bryan Skarlatos, a lawyer for Ver, told The Post that he was “very disappointed and surprised” by the arrest while his client was traveling in Spain.
“Mr. Ver relied on leading tax professionals to help him report his Bitcoin and he always intended to fully comply with his US tax obligations,” Skarlatos said.
“We look forward to establishing his innocence in court, if necessary.”
His indictment came on the same day that Changpeng Zhao, founder of cryptocurrency exchange Binance, was sentenced to four months in prison after pleading guilty last year to money laundering.
In 2014, Ver defended Charlie Shrem after the co-founder of now-defunct BitInstant was charged with money laundering. Shrem was convicted and sentenced to two years in prison.
“It’s just because certain men with guns don’t like what other people are doing with their own money, so they decide it’s okay to lock those people in a cage,” Ver told The Verge.
“Even if absolutely everything the government is alleging is true, Charlie has done nothing that’s morally wrong.”
By law, anyone who renounces US citizenship must file tax returns that report capital gains from the sale of their assets, including bitcoin.
Ver was also legally required to pay an “exit tax” on the capital gains.
Prosecutors alleged that Ver gave up his citizenship for tax purposes.
Specifically, when someone gives up their citizenship, their property is treated as having been sold for its fair market value the day before they renounced their citizenship in a “constructive sale.”
Under federal tax law, any gain arising from that “constructive sale” must be accounted for in that tax year.
The day he became a St. Kitts and Nevis citizen, Ver and two companies he owned, MemoryDealers.com and Agilestar.com, held about 131,000 bitcoins that at the time each traded for about $871, valuing them at more than $114 million.
Prosecutors said Ver hired a law firm to help him prepare his expatriation-related tax returns and an appraisal to value his companies, but provided them false or misleading information about how much of the cryptocurrency they in fact owned.
Ver’s law firm is alleged to have prepared and filed tax returns that undervalued the two companies and their bitcoins.
The returns also failed to note that Ver personally owned the digital currency, it was alleged in the indictment.
Ver later reclaimed possession of the 70,000 bitcoins the two companies owned and sold them for about $240 million in 2017, the indictment said.
But prosecutors said he failed to pay taxes he owed on distributions from those two US companies.
The indictment alleged that in total, the Internal Revenue Service was deprived of $48 million in taxes from 2014 to 2017.
With Post Wires
