Roger Ver arrested and charged with US mail fraud and tax evasion

Getting your Trinity Audio player ready...

U.S. authorities have arrested Roger Ver on charges of mail fraud, tax evasion and filing false tax returns, bringing the infamous anarchist under the thumb of the country whose citizenship he renounced. 

On April 30, the Department of Justice announced that Ver had been arrested in Spain this past weekend and would be the subject of extradition proceedings. The DoJ unsealed an indictment against Ver detailing his evasion of “at least” $48 million in taxes he owed Uncle Sam. The investigation into Ver was conducted with the assistance of the Internal Revenue Service’s Criminal Investigation cybercrimes unit.

The focus of the investigation starts with Ver’s acquisition of thousands of BTC tokens, a process that began in 2011 through two Ver-controlled California-based companies: MemoryDealers.com Inc. and Agilestar.com Inc. Accounts in these companies’ names were opened at digital asset exchanges including Mt Gox and BitStamp.

Ver’s two companies held approximately 73,000 of his total 131,000 BTC tokens in February 2014, around the time that Ver renounced his U.S. citizenship after obtaining citizenship in the Caribbean island nation of Saint Kitts and Nevis.

Anyone renouncing their U.S. citizenship is required to file tax returns indicating capital gains from the constructive sale of one’s world-wide assets and to report the fair market value of those assets. Ver hired a law firm to assist him in this process, as well as two appraisers to value his two companies.

Ver allegedly provided false or misleading information to the law firm and appraisers regarding how many BTC he and his companies owned. For instance, in April 2013 he told Appraiser 1 that he controlled only 25,000 BTC rather than the 117,000 that were attributable to him at the time.

Ver also fought with his law firm’s tax preparers, who kept insisting that Ver owed the taxman millions. Ver called these calculations “impossible and unreasonable.” Ver also insisted that BTC wallets “were not registered to any name or associated with a tax id, and that no one, including the IRS” could freeze or seize the tokens within those wallets.

In other instances, Ver simply refused to quantify his BTC holdings with his law firm’s tax preparers. Ver also mused about the tax implications of giving all of his BTC to “my partner (not legally married wife) in Japan.” This resulted in Ver’s law firm filing a 2016 tax form falsely claiming that he’d “gifted 25,000 [BTC] to his partner on November 15, 2011.” Ver personally signed the form.

The net result of all this was Ver filing tax returns that “substantially undervalued [Ver’s] two companies and their 73,000 [BTC] and did not report that Ver owned any [BTC] personally.”

The indictment claims that Ver’s two companies still held around 70,000 BTC by June 2017, when Ver took personal possession of them. That November, he sold “tens of thousands” of these tokens for around $240 million via the Kraken, Bitfinex, Bittrex and Poloniex exchanges. Ver then transferred the cash to bank accounts in the Bahamas under his control.

Ver may have renounced his U.S. citizenship, but the two companies remained U.S. corporations, meaning Ver was required to report “certain distributions such as dividends” from these companies. The indictment claims that Ver “concealed from his accountant that he had received and sold” these tokens, resulting in Ver’s 2017 tax return failing to report any gain or tax owed from the distribution of the tokens.

Bad people do bad things

In what appears in hindsight to be an accidental but truly epic self-own just a day or two before his arrest, Ver tweeted on April 25: “Don’t expect bad people to do good things.” (When Ver gets out of prison, he may want to explore becoming one of those late-night TV psychics.)

This is hardly Ver’s first brush with the law, considering that he once did time in a U.S. prison for the illegal sale of explosive materials (which likely won’t help him when it comes time for sentencing on the tax charges).

More recently, Ver was sued over a $21 million marker he allegedly refused to honor to an offshoot of Digital Currency Group’s bankrupt digital asset lending platform Genesis Global Capital.

Before that, Ver allegedly refused to honor a $47 million marker he held at the similarly-defunct CoinFLEX exchange, which filed for restructuring in August 2022. Ver denied responsibility, claiming instead that CoinFLEX owed him money. None of this bickering helped CoinFLEX’s other customers, who ultimately filed suit against former CEO Mark Lamb for allegedly helping Ver avoid responsibility.

News of Ver’s arrest came on the same day that Binance founder Changpeng ‘CZ’ Zhao was sentenced to four months in prison after years of ignoring U.S. laws and regulations. The sentence was far shorter than most observers expected and much shorter than the DoJ’s preferred sentence of 36 months.

Regardless, one can’t help but notice that everyone who has expended such effort to publicly denigrate the BSV Blockchain keeps ending up behind bars. It’s almost as if all the discussion of their illicit activities you can read about on CoinGeek has a basis in reality. Huh…

Watch: Teranode is the future of the Bitcoin network