An early Bitcoin adopter facing extradition to the U.S. for criminal tax fraud charges urged President Trump for assistance while telling a federal court he is not a fugitive as the federal government claims.
Pardon plea.
Roger Ver, known by the moniker “Bitcoin Jesus” for his early investment and promotion of the popular cryptocurrency, took to social media over the weekend to assert his innocence and petition Trump’s intervention via executive powers.
“Mr. President, I am an American, and I need your help,” Ver posted January 26 on X, formerly Twitter. “Only you, with your commitment to justice, can save me,” he added, tagging the president’s recently reinstated account. In the same post, Ver included a video claiming to be, like Trump, a “victim of lawfare.”
On February 15, 2024, a grand jury in the U.S. District Court for the Central District of California indicted Ver with “three counts of mail fraud, two counts of tax evasion, and three counts of subscription to a false tax return,” according to a Department of Justice press release when the indictment was unsealed late April.
Ver is a former resident of Santa Clara, California, but completed the expatriation process to renounce his U.S. citizenship in 2014. He most recently took residence in Tokyo, Japan, before his arrest in Spain in connection with the eight counts by the California grand jury. Ver stated in his video post that he is currently still in Spain but may soon be extradited to the U.S. for a possible sentence of 109 years.
Also on Sunday, an X user asked Elon Musk, who heads the Trump administration’s Department of Government Efficiency, about a possible pardon for Ver.
“Roger Ver gave up his US citizenship,” replied Musk. “No pardon for Ver. Membership has its privileges.”
Exit tax and undisclosed Bitcoin sales.
Code Sec. 877 and 877A provide for expatriation rules and tax ramifications for renouncing one’s U.S. citizenship. Current treatment applies to those who expatriated on or after June 17, 2008. Generally, Section 877A imposes a so-called mark-to-market regime wherein an expatriate’s property is deemed sold based on its fair market value on the day prior to the date of expatriation.
Per the IRS’ webpage, “[a]ny gain arising from the deemed sale is taken into account for the tax year of the deemed sale notwithstanding any other provisions of the Code. Any loss from the deemed sale is taken into account for the tax year of the deemed sale to the extent otherwise provided in the Code.” The “wash sale rules” under Code Sec. 1091 not apply, however.
Ver, upon his expatriation, was required to file U.S. tax returns reporting the capital gains from the sale of his Bitcoins and pay what is known as the “exit tax” on those capital gains. Between himself and his two companies, MemoryDealers and Agilestar, Ver owned approximately 131,000 units of Bitcoin.
The indictment alleged that Ver gave false or misleading information to the law firm hired to file the required tax returns, as well as to the appraiser tasked with valuing the two companies. Further, in 2017 Ver allegedly hid from his financial team sales of crypto assets held by his companies to the tune of $240 million.
“Even though Ver was not then a U.S. citizen, he was still legally required to report to the IRS and pay tax on certain distributions such as dividends from MemoryDealers and Agilestar, which were U.S. corporations,” the Justice Department explained.
It is estimated that Ver caused the IRS to lose $48 million.
Legal developments.
On December 3, 2024, Ver filed a motion to dismiss all eight counts on the grounds that the exit tax is constitutionally invalid and that the indictment is based on “impermissibly vague foundations.”
The government’s response, filed January 13, opposed the motion, maintaining that the exit tax is within Congress’ authority and does not run afoul of due process. Ver’s vagueness challenge is also insufficient, the filing continued, because the charges are clear.
But before responding to Ver’s merit arguments, the government asserted that Ver “is a fugitive” and asked the court to apply the fugitive disentitlement doctrine. According to the government, “the fact that Ver was outside the U.S. when he was indicted is irrelevant. His knowledge of the charges against him and his refusal to submit to this Court’s jurisdiction makes him a fugitive.”
Ver filed a reply brief on January 27, again attacking the validity of the exit tax, calling the tax “an unconstitutional burden on the fundamental right to expatriate.” As for the government’s fugitive claim, Ver held that he qualifies as neither a “traditional fugitive” fleeing a court’s jurisdiction after committing a crime there, nor a “constructive flight fugitive.”
According to the reply, a constructive flight fugitive “is ‘a person who allegedly committed crimes while in the United States,’ then left the country and refused to return in order to avoid prosecution.”
He emphasized to the court that he “has not lived in the United States since approximately 2006” and “has not fled and is not hiding.”
For more on the recognition of gains and losses under the mark-to-market expatriation rules, see Checkpoint’s Federal Tax Coordinator ¶O-11651.1.
Take your tax and accounting research to the next level with Checkpoint Edge and CoCounsel. Get instant access to AI-assisted research, expert-approved answers, and cutting-edge tools like Advisory Maps and State Charts. Try it today and transform the way you work! Subscribe now and discover a smarter way to find answers.