What do you get when you mix crypto currency, a criminal tax investigation, and political access? Apparently, under the current presidential administration, the abrogation of a criminal record and jail time.
When I last posted about Roger Keith Ver, a U.S. expatriate popularly known as Bitcoin Jesus for his early adoption and advocacy of the digital currency, he was fighting extradition from Spain to the United States to face, in part, federal tax charges.
Tax investigators alleged that Ver evaded more than $48 million in taxes due on profits from the sale of $240 million in crypto tokens.
Now, however, Ver doesn’t have to return to the United States or face the possibility of any time behind bars. There won’t even be a blemish on his record.
How did this major criminal tax case essentially disappear? His attorneys cut a deal with the Department of Justice to have the indictment dismissed.
Oh yeah, there was one thing required of Ver. He had to pay Uncle Sam $49.9 million.
Legal settlement or payoff? What’s so bad about that, some might ask. Ver’s payment basically covers the taxes, penalties, and interest the Internal Revenue Service and DoJ said he owed.
Federal prosecutors also were spared the effort of arguing the merits of their case in court, without worrying about the possibility a jury wouldn’t return a conviction.
Here’s the issue. The payment sans any other ramifications comes across more as a payoff than a legal settlement.
The investigative journalism group Pro Publica takes a deep dive into the Ver case, detailing how Ver walked away free and clear federal tax troubles after buying his way out of the U.S. legal system.
Equal justice gap growing under Trump: Rich individuals who can afford expensive lawyers always have had an advantage when facing civil and criminal legal entanglements, tax and otherwise.
But the Ver case, contends Pro Publica, is representative of the new way the federal legal system has been operating since Donald J. Trump returned to the Oval Office.
Enforcement of white-collar criminal acts has eroded under the second Trump administration, write Pro Publica reporters Avi Asher-Schapiro and Molly Redden in their article posted Jan. 22. They elaborate, using the Ver case as an example, in the excerpt below.
“Ver was able to pull off this coup by taking advantage of a new dynamic inside of Trump’s Department of Justice. A cottage industry of lawyers, lobbyists and consultants with close ties to Trump has sprung up to help people and companies seek leniency, often by arguing they had been victims of political persecution by the Biden administration. In his first year, Trump issued pardons or clemency to dozens of people who were convicted of various forms of white-collar crime, including major donors and political allies. Investigations have been halted. Cases have been dropped.”
In many cases, the financial restitution that courts previously had ordered also was erased.
Federal tax investigations hard hit: Pro Publica says the changes in how tax cases are now treated are especially notable. The current administration has “upended the way tax law violators are handled,” write Asher-Schapiro and Redden.
Another story excerpt below explains.
“Late last year, the administration essentially dissolved the team dedicated to criminal tax enforcement, dividing responsibility among a number of other offices and divisions. Tax prosecutions fell by more than a quarter, and more than a third of the 80 experienced prosecutors working on criminal tax cases have quit.”
The Ver case dismissal also undermined prosecutorial efforts to make it an example of IRS and federal law enforcement efforts to fight widespread cryptocurrency tax evasion.
I guess now we’ll just have to hope that the Form 1040 question about digital transactions and new Form 1099-DA will be enough to get appropriate tax compliance from such asset owners.
Tax Felon Friday: Details on how the Ver case stands out amid tax crime investigations and prosecutions under Trump 47 earns the Pro Public story dual Don’t Mess With Taxes recognition.
In addition to being today’s featured Tax Felon Friday item, it also gets an early Saturday Shout Out. Yes, I’m finally, and slowly, getting around to sorta reviving this weekend feature after the ol’ blog’s move.
If after reading the Pro Publica piece you want to catch up on all sorts of tax miscreants, from those just charged and/or indicted to those convicted and/or confessed and sentenced, the ol’ blogs’ special Tax Felon Friday page is a good place to start.
And if you want more tax crime posts, notably those that were published long before I started collecting them in a special end-of-week feature, you can peruse, what else, the tax crimes category. You’ll find this post at the top of that collection right now, so just scroll down for more.
