DC Attorney General Sues MicroStrategy and Michael Saylor For Evading Tax
- In a lawsuit filed on Wednesday, District of Columbia Attorney General Karl Racine accused Michale Saylor of tax evasion and MicroStrategy of acting as a helper in the act.
- Saylor, who currently serves as the co-founder and executive chairman of the company, has allegedly resided in Virginia or Florida, which have lower or no personal income tax.
After stepping down as the Chief Executive Officer of the business intelligence company MicroStrategy, billionaire and Bitcoin proponent Michael Saylor is facing a lawsuit accusing him of evading $25 million.
In a lawsuit filed on Wednesday, District of Columbia Attorney General Karl Racine accused Saylor of tax evasion and MicroStrategy of acting as a helper in the act.
Saylor, who currently serves as the co-founder and executive chairman of the company, has allegedly resided in Virginia or Florida, which have lower or no personal income tax, respectively. However, according to the lawsuit, he has several different properties around D.C., including his yacht on the Georgetown waterfront, a penthouse apartment near Georgetown, or the Potomac River when the apartment was undergoing renovations.
The lawsuit contains multiple screenshots of what appear to be postings from Saylor’s Facebook page from several years ago that mention his “Georgetown balcony,” refer to it as his “home,” and tag Washington, D.C.
The AG’s Office argues in the lawsuit that Saylor was questioned by MicroStrategy’s then-chief financial officer in 2014 regarding his potential tax evasion as a critical problem for the company. According to the lawsuit, Saylor and MicroStrategy ultimately decided to reduce Saylor’s salary to a mere $1 in order to lower the likelihood that law enforcement would learn about the alleged scam. However, according to the AG, Saylor kept receiving “fringe benefits” with a “high cash value,” like the usage of the company jet.
According to a press release, MicroStrategy allegedly “had detailed information confirming that Saylor was in fact a D.C. resident” but nevertheless chose to withhold the information.
“With this lawsuit, we’re putting residents and employers on notice that if you enjoy all the benefits of living in our great city while refusing to pay your fair share in taxes, we will hold you accountable,”
Karl stated on Twitter.
According to Racine’s office, the lawsuit is the first to be filed under the False Claims Act, a recently established law. According to the A.G.’s office, the district law encourages whistleblowers to disclose tax fraud by incentivizing them. It allows the court to impose fines up to three times the value of the taxes evaded.
The district lawsuit stems from a separate lawsuit filed against Saylor in April last year, accusing him of neglecting to pay his income taxes from 2014 through 2020. The complaint was submitted by the whistleblower behind a seal, but it was made public with the new filing on Wednesday.
The AG’s office claimed to have conducted its own investigation into the whistleblower’s claim and discovered MicroStrategy had submitted false W-2s with his Florida address and had failed to withhold taxes supposedly owed to the district.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
