An early investor in Bitcoin who made millions acquiring the cryptocurrency and later called himself “Bitcoin Jesus” has been arrested to face fraud charges.
Roger Keith Ver, 45, was arrested last weekend in Spain. He previously resided in Santa Clara, California, and most recently lived in Tokyo.
Ver faces three counts of mail fraud, two counts of tax evasion and three counts of subscribing to a false tax return, according to the U.S. Department of Justice.
The DOJ said it would seek to extradite Ver to the United States to face the charges.
Ver was an early adopter of Bitcoin, acquiring hundreds of entire coins through two companies he owned that sold computer and networking hardware. He heavily promoted the cryptocurrency online, which later led him to adopt the nickname “Bitcoin Jesus,” the DOJ said.
In February 2014, Ver obtained citizenship in St. Kitts, a Caribbean island, and renounced his U.S. citizenship, a process called expatriation. As part of this process, he was required under federal law to file tax returns reporting capital gains from the sale of his global assets, including Bitcoin, and to report the fair market value of its assets.
He also had to pay a tax, called an “exit tax,” on these capital gains as part of his expatriation efforts.
According to the DOJ, Ver and his companies owned approximately 131,000 entire bitcoins traded on several major cryptocurrency exchanges at a price of approximately $871 each. Ver’s two companies held approximately 73,000 of these coins.
Authorities say Ver hired a law firm to assist with his expatriation and to help him prepare his corresponding tax documents. He allegedly hired an appraiser to value his two companies, but provided false or misleading information to conceal the true amount of cryptocurrency he and his companies owned.
As a result of its alleged deception, the law firm prepared its tax documents and significantly undervalued the two companies and their 73,000 bitcoins. Ver himself has stated that he does not personally own any Bitcoin.
His indictment also alleges that as of June 2017, Ver’s two companies still held approximately 70,000 entire bitcoins. The DOJ said he transferred those bitcoins to himself in November and then sold tens of thousands of them on cryptocurrency exchanges, netting him about $240 million. The average closing price of bitcoin in November 2017 was above $7,800, according to Statmuse.
Even though he was no longer a U.S. citizen, Ver was still legally required to report these transactions to the IRS and pay taxes on certain distributions because both of his companies were U.S. corporations.
The DOJ alleges that Ver also withheld information from his accountant about the transfer and sale of the bitcoins and failed to report any gains or pay taxes related to the transaction on his 2017 individual return.
Authorities say Ver caused a loss to the IRS of at least $48 million.
If convicted on all counts, Ver would face a maximum sentence of 20 years in federal prison for each count of mail fraud, up to five years in federal prison for each count of tax evasion and up to three years in federal prison for each count of subscribing to a false tax return.
The matter remains under investigation by the IRS.
A 2014 profile in Bloomberg details Ver’s efforts to attract wealthier crypto investors to become citizens of St. Kitts, boasting of the company’s lack of personal income or capital gains taxes. island.
For those curious, today a single Bitcoin is worth over $60,000.
