"Hacking the War on Drugs: I put weed in my sock drawer, which worked until my roommate called the cops on me as a prank."
For example, if he earns $60, and his expense is paying someone $50, either:
a) He pays them $50, they pay taxes on that $50, and he pays taxes on the $10, or
b) He does his coin trick, they pay taxes on, say, $5, and he pays taxes on $55 (because he gives the coins a low value).
If all he's doing is buying something at one price, writing down its value, and giving it away, then anyone can do this. Try it with shares of a privately-held company, or golf club memberships, or anything that doesn't freely trade.
It's like breaking into a store in order to steal something, and then leaving behind enough money to pay for it. Pointlessly flouting the law.
If you sell something for which you paid $50 for $950, you absolutely do pay taxes for the gain.
That's what's missing from the story. Either we're reading it wrong, or what he committed was a conventional tax fraud with a gold-bug spin.
He will probably be convicted for hiding assets, though.