One of the first investors in bitcoins, nicknamed the “Bitcoin Jesus“, was arrested in Spain on accusations of evading the payment of at least $48 million in taxes, the US Department of Justice said on Tuesday.
Roger Ver, 45, was charged with mail fraud and tax evasion in a plea filed in federal court in Los Angeles that was unsealed after his arrest in Spain over the weekend, the DoJ said.
Last year, the U.S. Supreme Court dismissed an unnamed law firm’s appeal of court orders finding it in contempt of a grand jury subpoena because it had failed to release records related to a client matching Ver’s description.
Bryan Skarlatos, Ver’s attorney, said in a statement that he was “very disappointed and surprised” by Ver’s arrest while traveling in Spain.
“Mr. Ver relied on leading tax professionals to help him report his bitcoin and always intended to be in full compliance with his U.S. tax obligations,” Skarlatos said. “We look forward to establishing his innocence in court, if necessary.”
Ver, who for a time served as CEO of digital wallet developer Bitcoin.com, began acquiring bitcoin in 2011 and actively promoted the cryptocurrency, earning him the name “Bitcoin Jesus.”
In 2014, Ver renounced his U.S. citizenship after becoming a citizen of St. Kitts and Nevis, which prosecutors said had tax consequences for him.
Specifically, when someone renounces their citizenship, their property is considered sold for its fair market value the day before, in a “constructive sale.”
Under federal tax law, any gain arising from that “constructive sale” must be accounted for in that tax year.
On the day he became a citizen of St. Kitts and Nevis, Ver and two companies he owned, MemoryDealers.com and Agilestar.com, held around 131,000 bitcoin that were each trading for around $871 at the time, valuing them at more than 114 million dollars.
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 with false or misleading information about the amount of cryptocurrency he actually owned.
The Justice Department said that as a result, the law firm prepared and filed tax returns that undervalued the two companies and their bitcoin and failed to report any of Ver’s personal property.
Ver later took possession of the 70,000 bitcoins held by the two companies and sold them for about $240 million in 2017, according to the indictment. But prosecutors said he failed to pay the taxes he owed on distributions from those two U.S. companies.
The indictment alleged that in total, the Internal Revenue Service was deprived of $48 million in tax payments between 2014 and 2017.
By Nate Raymond, Reuters
Source: Ambito
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