An early bitcoin investor known as the “Bitcoin Jesus” has been arrested in Spain on US allegations of evading at least $48 million in taxes, the US Department of Justice announced on Tuesday.
Roger Ver, 45, was charged with mail fraud and tax evasion in an indictment released in federal court in Los Angeles after being arrested in Spain over the weekend, according to the department.
Last year, the United States Supreme Court denied an unnamed law firm’s appeal of court orders holding it in contempt of a grand jury subpoena for failing to provide data relating to a client matching Ver’s description.
Bryan Skarlatos, Ver’s lawyer, said in a statement that he was “very disappointed and surprised” by the detention while vacationing in Spain.
“Mr. Ver relied on leading tax professionals to help him report his Bitcoin and he always intended to fully comply with his U.S. tax obligations,” Skarlatos said in a statement. “We look forward to establishing his innocence in court, if necessary.”
Ver, who was previously the CEO of digital wallet company Bitcoin.com, began acquiring bitcoins in 2011 and actively advocated the cryptocurrency, earning him the nickname “Bitcoin Jesus.”
Ver resigned his US citizenship in 2014 to become a citizen of St. Kitts and Nevis, which prosecutors said had tax implications for him.
When someone renounces their citizenship, their property is handled as if it was sold for its fair market value the day before in a “constructive sale.”
According to federal tax rules, any gain resulting from that “constructive sale” must be accounted for in that tax year.
Ver and two firms he owned, MemoryDealers.com and Agilestar.com, possessed approximately 131,000 bitcoins on the day he became a St. Kitts and Nevis citizen, with each trading for around $871 at the time, valuing them at more than $114 million.
Prosecutors said Ver hired a law firm to help him submit his expatriation-related tax returns and an appraisal to value his firms, but gave them incorrect or misleading information about how much cryptocurrency they actually held.
According to the Justice Department, as a result, the law firm drafted and submitted tax returns that undervalued the two firms and their bitcoins while failing to register any that Ver personally held.
Ver later seized custody of the two companies’ 70,000 bitcoins and sold them for around $240 million in 2017, according to the indictment. However, authorities said he failed to pay taxes on distributions from those two US entities.
The indictment claimed that the Internal Revenue Service lost $48 million in taxes between 2014 and 2017.
The Justice Department has stated its intention to pursue Ver’s extradition.