To his followers, Roger Ver is known as Bitcoin Jesus, a charismatic advocate of the cryptocurrency that is once again captivating investors with record-breaking gains. But to the Internal Revenue Service, Ver symbolizes a new target in the digital age: a crypto holder suspected of failing to pay taxes after selling tokens.
U.S. prosecutors charged Ver this year with evading more than $48 million in taxes for selling $240 million in tokens. It’s the most prominent case dealing solely with tax fraud and digital-asset sales, and marks a break from the tradition of prosecutors tacking tax charges onto crypto cases for crimes like money laundering, ransomware attacks and investor scams.
Ver, 45, is awaiting a Spanish judge’s decision on whether he must be extradited to America after his April arrest in Barcelona while attending a crypto conference. The U.S. expatriate spent a month in jail before getting out on bail and moving to Mallorca, where he’s received a steady stream of visitors. An outspoken critic of the U.S. government, he said he’s being persecuted by prosecutors.
“They don’t like me, and they don’t like my political views, and they just came at me every which way,” Ver told Bloomberg News in an exclusive interview in late October.
Ver, a U.S. expatriate, awaits a Spanish judge’s decision over whether he will be extradited to America to face tax fraud charges.
Ver said the Justice Department has ignored evidence that helps his defense and refutes a central premise by prosecutors — that he intended to cheat the IRS. Rather, he said, he relied on professionals who advised him when IRS policy on taxing crypto sales was unsettled.
“I instructed all my tax attorneys and preparers, ‘We need to do everything perfectly because I don’t want any problem with the IRS at all,”‘ Ver said. “That was their instructions the whole time.”
A Justice Department representative declined to comment.
The seeds of Ver’s legal peril lay in his success as an early crypto investor — long before the latest Bitcoin rally fueled by Donald Trump’s U.S. presidential win. They center on his representations to the IRS and the agency’s reconstruction of his holdings.
Ver grew up in Silicon Valley, founding a computer company called MemoryDealers at the precocious age of 19. He also engaged in tax protests and ran for California’s legislature at 21 as a libertarian.
In 2001, he pleaded guilty to dealing explosives without a license. (Ver says he simply sold firecrackers on eBay.) He served 10 months in prison, which hardened his attitude toward the U.S. government. He left America in 2006, moving to Japan. He focused on building MemoryDealers and another firm, Agilestar, which sold optical transceivers.
Spreading the gospel
When crypto began, he embraced its promise for transferring wealth without government interference. He started buying Bitcoin in 2011 for less than $1, touting it at barbecues, parties and everywhere else. Intense and fast talking, he spread the vision of using crypto to buy a sandwich or even a car. When Bitcoin hit it big, Ver touted its potential from conference stages.
He co-founded Blockchain.com, a crypto company once valued at $14 billion, and was an early investor in payment processor BitPay and digital-asset firm Ripple. When the Bitcoin network underwent a software upgrade he opposed in 2017, Ver broke with the community, switching to a split-off called Bitcoin Cash. He said his current holdings include Bitcoin, Bitcoin Cash, Ether and Zeno.
Despite his notoriety, Ver decided in 2014 to renounce his U.S. citizenship, later becoming a citizen of St. Kitts and Nevis. U.S. citizens who expatriate and are worth more than $2 million must report their worldwide assets to the IRS, and pay an exit tax based on their asset sales.
As he planned to expatriate, prosecutors allege, Ver hid the number and value of Bitcoin he owned and controlled personally and through MemoryDealers and Agilestar, his California-based companies.
The IRS used blockchain analysis to determine that by early 2014, Ver and his companies owned about 131,000 Bitcoin trading between $782 and $960, according to the indictment — more than he reported in tax filings. He’s accused of tax evasion, wire fraud, and filing a false tax return.
Ver worked with a law firm and appraisers on the exit tax, but gave them false or misleading information about his Bitcoin holdings, and an exit tax return filed in 2016 failed to report the Bitcoin he owned personally and underreported the value of his companies, prosecutors charge.
The indictment also alleges Ver “fraudulently misrepresented and concealed” from the IRS the crypto that his companies sold in 2017 for about $240 million.
Ver disputes this characterization, but declined to discuss the indictment further or elaborate on his crypto holdings with Bloomberg.
A website, freerogernow.org, is linked to Ver’s personal website and encourages supporters to sign an open letter calling on the U.S. government to end his “unjust prosecution.” It adds some details about his investigation, including claims that IRS agents interrogated his tax lawyer in 2018 without a warrant and that litigation ensued about communications with his lawyers.
In 2022, the U.S. Supreme Court took up a case that didn’t name the parties but matched Ver’s circumstances. The court dropped that case in 2023 without issuing a ruling.
If he’s extradited, Ver’s case would be the first to go to trial on crypto-only tax charges. In February, a Texas man, Frank Ahlgren, was accused of underreporting capital gains from selling $3.7 million in Bitcoin. Ahlgren pleaded guilty in September.
Ver, who has more than 700,000 followers on X, spent years under IRS investigation as he traveled the world. In 2021, he posted a satirical video titled “Taxation is Theft.”
Ver was indicted Feb. 15 under court seal but didn’t learn about it until weeks later, when he was at the Privacy Guardians conference in Barcelona. His book, Hijacking Bitcoin: The Hidden History of BTC, had just gone on sale. A police officer approached him in the lobby of the W Hotel, asked him to confirm his identity, and said he had an Interpol arrest warrant for him.
“The bottom kind of fell out of my stomach and I was like, ‘Oh, my God, the U.S. is going to do this to me again,”‘ Ver said.
Back to jail
With his arrest, Ver returned to prison, this time to a two-man cell in Spain. Some inmates incorrectly assumed he was an American spy or undercover cop, he said.
“I didn’t tell anybody in there who I was because I didn’t want to get extorted or have any sort of problems with anybody,” Ver said.
Spain has been a close ally of the U.S. in extradition cases. This year, Spain sent Douglas Edelman, a former defense contractor, to face U.S. charges that he evaded taxes on more than $350 million in income. He’s pleaded not guilty and denies the charges.
Ver said he’s spending his days in Mallorca talking to his lawyers on Zoom, practicing Brazilian jiujitsu and entertaining friends visiting from overseas. He’s attended Bitcoin meetups, where he said he was well received.
Ver appeared in an HBO documentary about the origins of Bitcoin. A sparring partner from jiujitsu said he’s seen him in the show.
“I said, ‘Please, if you don’t mind, don’t mention that to anybody else.’ He said, ‘Sure, no problem.’ But he had kind of a sly grin when he said that to me.”
The Financial Accounting Standards Board issued an invitation to comment Thursday requesting input on financial key performance indicators such as EBITDA and free cash flow and how they should be treated.
FASB is defining a financial KPI as a financial measure that is calculated or derived from the financial statements and/or underlying accounting records that is not presented in the GAAP financial statements. That includes measures that come from amounts presented in the financial statements, measures derived from adjusting amounts presented in the financial statements, and measures derived from or calculations based on other information included in the financial statements or other financial records.
Some examples of financial KPIs include earnings before interest, taxes, depreciation and amortization (EBITDA); free cash flow (FCF); organic sales growth; and adjusted net income.
“Whether they’re concerned about them and which ones they are and aren’t, I’ll leave to them,” said Jones. “We have heard from some stakeholders that we should be considering whether there are certain financial KPIs that should be brought into the financial statements. Now, what does that mean? For some that might mean, are there some financial KPIs that could benefit with a standardized definition, say a single definition of EBITDA, and what goes into that? For others, it may simply mean, what industries does it make sense to provide a KPI in the financial statements? Alternatively, some look at it and say, ‘Well, maybe there are KPIs that the company’s already using. Is there a way under a management type approach to bring them into the financial statements, or should potentially, they not be included in the financials?’ So it’s really us getting input on all those issues. Depending on what we hear from that ITC, we’ll bring that back to our board, and our board will be able to make decisions on [whether] there’s a need for standard-setting in this area.”.
FASB is issuing the invitation to comment as part of a research project on financial key performance indicators for business entities. An ITC is a staff document prepared at the direction of the FASB chair in which the board does not express any preliminary views. Responses to the questions in the ITC will help inform FASB as it considers whether to add a project on financial KPIs to its technical agenda and, if it’s added, to determine the objective and scope of the project.
During previous outreach, including a 2021 agenda consultation, FASB heard feedback from constituents that a project on financial KPIs should be considered. But they expressed different views about the nature and extent of the perceived issues, whether the board should add a project to its technical agenda, and, if a project is actually added, what the objective of the project should be.
FASB staff issued the ITC to hear more feedback on potential standard setting for financial KPIs, including whether financial KPIs should be standardized and, if so, which ones? Another question is :Should financial KPIs be required or permitted to be disclosed in an entity’s GAAP financial statements and, if so, when and for what types of entities?
FASB is asking for comments on the ITC by April 30, 2025.
Everything must go; have con, will travel;gold rush;and other highlights of recent tax cases.
Deltona, Florida: Business owner David Albert Fletcher has pleaded guilty to evading payment of more than $1.7 million he owed for tax years 2004 through 2014.
Fletcher owned and operated several furniture liquidation businesses and for 2004 through 2013 did not timely file his federal income tax returns or pay taxes. After an audit, the IRS assessed $1.7 million in taxes, interest and penalties.
To evade collection, Fletcher concealed his income and assets from the IRS, including by using nominees to hide his purchases of luxury vehicles. He also filed returns that understated his income, and when interviewed by an IRS special agent lied about how much he earned.
Fletcher faces up to five years in prison.
Chatham, New Jersey: John Goggins, former senior vice president and general counsel for a large public corporation, has been sentenced to eight months in prison for willfully failing to file federal income tax returns.
Goggins, who previously pleaded guilty to a four-count information charging him with willfully failing to file federal income tax returns for 2018 through 2021, earned total gross income in those years of $54 million from wages, restricted stock awards, the exercise of annual nonqualified stock options, interest, dividends and gains from stock sales.
Goggins was also sentenced to a year of supervised release and was ordered to pay $3.11 million in restitution to the IRS (which has already been paid) and was fined $40,000.
Indianapolis: A U.S. district court has permanently enjoined tax preparer Juan Santiago and his company from preparing federal returns for others and from owning or operating tax prep businesses in the future.
Santiago failed to respond to the civil complaint filed against him, so the court entered the permanent injunction by default.
Santiago resides in Lakeland, Florida, but travels to Indianapolis for tax season to operate Madison Solutions LLC. The complaint alleges that he and Madison Solutions used a variety of schemes to improperly reduce clients’ tax liabilities or to obtain undeserved refunds, including by repeatedly placing false or incorrect items, deductions, exemptions or statuses on clients’ returns without their knowledge.
For example, the complaint alleges that Santiago routinely elected head of household status and Child Tax Credits for clients when they were otherwise not qualified for such status or credits. The complaint also alleges that Santiago reported fictitious businesses on returns and fabricated business expenses and income to fraudulently reduce taxable income.
Wilmington, Delaware: Business owner Robert Higgins, of West Chester, Pennsylvania, has been convicted on charges of mail, wire and tax fraud.
He owned and operated First State Depository, a precious metals depository that held more than $100 million in customer assets, primarily in the form of gold and silver bars and coins. Higgins diverted customer assets to pay debts and finance his personal life, including two timeshares in Hawaii and luxury vacations. First State’s records indicated that at least $58 million worth of customer assets had been misappropriated; industry sources generally agree that this is the largest theft from a precious metals depository in U.S. history.
Higgins faces up to 20 years on the wire and mail fraud charges and five years on each tax fraud charge.
Ft. Worth, Texas: John Anthony Castro, 40, owner of the virtual tax prep business Castro & Co. who falsely inflated dozens of client returns, has been sentenced to more than 15 years (188 months) in prison for tax fraud.
Castro — who had graduated law school but repeatedly failed the bar exam — held himself out as an “international tax expert” and “federal practitioner” and falsely claimed to be a graduate of West Point.
He successfully marketed to clients around the world, claiming to be an expert on certain tax issues related to Australian expats, among other things. Between 2017 and 2019, he filed more than 1,900 returns on behalf of individuals worldwide. Castro promised his clients a significantly higher refund than they would receive from other preparers, claiming he knew how to identify and claim deductions that others did not. He added that there was no risk, as he split the additional refund amount with clients for his fee.
He did not share the return with clients before filing but instead informed them of the amount of the anticipated refund. On many occasions, Castro filed returns on behalf of clients without their permission or knowledge.
In other instances, he claimed deductions that had no basis in fact. Castro claimed deductions based on extreme and unsupported legal theories, including saying that deductions for any expense related to preventing an illness qualified as an “impairment related work expense;” expenses related to commuting to and from work; and the full value of one’s mortgage and utilities as long as the taxpayer had some Schedule C business to claim, among others.
When the victim-taxpayers learned what Castro had done, many demanded copies of their returns. Castro refused to engage in conversation and even delayed providing returns for months; he often acted in a highly vindictive manner when questioned or challenged by clients or others, berating individuals in emails, threatening legal actions or by filing amended returns, without clients’ permission or knowledge, that removed all deductions. Many of the victims have since been audited or filed amended returns.
Castro was also ordered to pay $277,243 in restitution.
Thornton, Colorado: Tax preparer Lance McCuistion, 56, has been sentenced to 52 months in prison after pleading guilty to preparing false returns for clients.
In July 2014, McCuistion pleaded guilty to preparing false returns in a prior investigation and was sentenced to probation. As a result of that offense, McCuistion was unable to obtain a PTIN. From around April 2018 through April 2022, McCuistion used PTINs in the names of three associates to prepare returns for clients.
These returns claimed items for which McCuistion knew the taxpayers were not eligible, with the aim of increasing refunds or reducing taxes.
Independence, Missouri: Business owner Richard Dean Schiele Jr., 51, has pleaded guilty to filing a false claim as part of a scheme to fraudulently receive nearly $1.4 million in federal COVID-19 relief money.
Schiele admitted he filed nine employer’s quarterly returns with the IRS on April 22, 2023, for a company he formed the same month called Schiele Family Own Distribution. The returns made a total of $1,392,716 in claims for pandemic-era credits against the company’s ostensible employment taxes. Schiele later admitted that the company had no employees in 2020 through 2022.
The IRS issued checks totaling $478,890 to Schiele; the Treasury recovered $348,764.91 from Schiele’s bank account.
The Public Company Accounting Oversight Board adopted a rule amendment Thursday that enables the PCAOB to address situations in which a registered firm has ceased to exist, is nonoperational or no longer wishes to remain registered.
It would apply when firms fail to file annual reports on PCAOB Form 2 and pay annual fees for at least two consecutive reporting years. Via Form 2, registered auditing firms give the PCAOB important information such as each audit client for which that firm issued any audit reports during a reporting period.
“Firm registration is a cornerstone of the PCAOB’s operations,” said PCAOB chair Erica Williams in a statement at the PCAOB’s meeting Thursday. “Firms are required by the Sarbanes-Oxley Act to register with the PCAOB in order to perform audits of publicly traded companies and SEC-registered broker-dealers or to play a substantial role in those audits. In addition to registering, filing an annual report through what’s called Form 2, allows the PCAOB to keep track of the firms who are eligible to perform those audits and to understand which audits, if any, they are performing. In turn, the PCAOB then uses that information for many purposes, including planning its inspections program, which inspects over 800 issuer audits in more than 30 jurisdictions around the world each year.”
The PCAOB noted that as of Aug. 31, 2024, 80 registered firms have not filed annual reports and have not paid annual fees for both the 2022 and 2023 reporting years.
“These firms include, for example, sole proprietorships that remain registered even though the sole proprietor has died; firms that registered with the board years ago but now appear to be defunct; and small firms, often in foreign countries, that cannot be reached through the primary contact person designated by the firm,” said Williams.
Those delinquencies obstruct the PCAOB’s ability to maintain an accurate list of registered firms that wish to maintain their registrations; ensure that Form 2 information is being reported to the public; collect mandatory annual fees; and use PCAOB staff time and resources efficiently.
“The amendment adopted today will not only make registration information more useful for investors, audit committees and other stakeholders, it will also improve the efficiency and effectiveness of our organization,” Williams stated.
The rule amendment would treat a PCAOB-registered firm’s failures both to file annual reports with the PCAOB and to pay annual fees to the PCAOB for at least two consecutive reporting years as a constructive request for leave to withdraw from PCAOB registration; and deem the firm’s registration withdrawn.
After the PCAOB issued the proposal in February of this year that included the amendment, the board received feedback from various commenters. While those commenters were generally supportive of the proposed amendment, the PCAOB also made changes to address stakeholder feedback. For example, the February proposal originally included a 30-day period for firms to send an email to the PCAOB’s Registration staff to stop the withdrawal process. In response to stakeholder input, the 30-day period was extended to 60 days. The February proposal also included a proposed new Rule 2400 regarding false or misleading statements concerning PCAOB registration and oversight. The PCAOB said it’s continuing to consider next steps regarding proposed Rule 2400.
PCAOB board member Christina Ho said during the meeting she had originally supported the proposal, but now has reservations about the timing.
‘Notwithstanding my support today for this ‘good housekeeping’ rule, I am deeply concerned about the possibility of the PCAOB adopting in the weeks ahead a series of ‘midnight regulations’ that could overwhelm the institutional review process, both here and at the Securities and Exchange Commission, that helps ensure that regulations have been carefully considered, are based on sound evidence, and can justify their costs,” she stated. “Moreover, correspondence from at least one member of a relevant committee of Congress has called on the federal financial regulatory agencies to suspend the proposal or promulgation of any regulations before the end of the current Administration. Modernizing our standards and rules is important, but if we rush to get things done before any changes in the composition of the Commission, we could end up wasting taxpayer dollars by adopting ill-considered rules and running our professional staff ragged while at the same time undermining the democratic process.”
Another PCAOB board member, George Botic, expressed his support for the rule amendment. “One area of focus for me over the past year has been the need for increased transparency,” he stated. “I believe that improved transparency and accessibility of PCAOB oversight activities on our website, in particular registration and inspection information, will help to better inform and equip investors, audit committee members, academics, and other stakeholders to not only understand our work but also to make better informed decisions. While I am hopeful for more efforts in this regard, I have been pleased with our work to date. Hand in hand with promoting transparency comes the responsibility to do our best to ensure that the information on the PCAOB’s website is not only accurate, but also useful and informative to a wide variety of stakeholders.”
The amendment is subject to approval by the Securities and Exchange Commission. If it’s approved by the SEC, the amended rule will take effect initially for annual reports and annual fees that are due in 2025, so a registered firm that doesn’t file an annual report and doesn’t pay an annual fee for both the 2025 and 2026 reporting years could be deemed withdrawn from registration under Rule 2107(h) starting in the fall of 2026.