Michael Saylor Sued For Tax Fraud
MicroStrategy and its founder Michael Saylor are being sued in civil court by Washington, DC, Attorney General Karl Racine over allegations of tax fraud.
The cloud-based computing company, the largest holder of Bitcoin among publicly traded companies, has helped "evade taxes he legally owes on hundreds of millions of dollars he’s earned while living in DC," Racine tweeted yesterday.
Racine described Saylor as “a billionaire tech executive who has lived in the District for more than a decade, but has never paid any DC income taxes.”
According to a press release from Racine’s office, Saylor is accused of avoiding paying income taxes in D.C through an “elaborate scheme” between 2014 and 2020. Saylor is said to have claimed to be a Florida resident (a state without income tax) but was living in D.C throughout most of the year and was enthusiastically open about his loophole.
Following a whistleblower lawsuit, Racines office investigated the allegations and found that Saylor had dodged paying more than $25 million in income taxes. The suit alleges that Microstrategy corroborated in the plan, including filing fake W2s statements with his Florida residence.
Racine estimates that Saylor and MicroStrategy could be in the water for more than $100 million between unpaid taxes and penalties.
"A decade ago, I bought an historic house in Miami Beach and moved my home there from Virginia," Saylor told Decrypt in a statement responding to the lawsuit. "Although MicroStrategy is based in Virginia, Florida is where I live, vote, and have reported for jury duty, and it is at the center of my personal and family life."
"I respectfully disagree with the position of the District of Columbia, and look forward to a fair resolution in the courts," he added.
Microstrategy has also disputed Racine's inclusion of the company in his action.
"The case is a personal tax matter involving Mr. Saylor," Microstrategy said in a statement to Decrypt. "The company was not responsible for his day-to-day affairs and did not oversee his individual tax responsibilities, nor did the company conspire with Mr. Saylor in the discharge of his personal tax responsibilities."
The company said the D.C. attorney general's accusations "are false, and we will defend aggressively against this overreach."
This is the first case the Attorney Genreal has brought up under the newly updated False Claims Law, he added, which “[encourages] whistleblowers to report residents who evade our tax laws by misrepresenting their residence.”
“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,” Racine added in a tweet thread.
Microstrategy holds 129,699 BTC, or about $2.99 billion worth at today's prices, per the company report, with the average price of purchase being around $30,664 a coin, which leaves the company currently in the red on its investment.
Michael Saylor is a prominent figure in the crypto industry, this lawsuit follows his recent move away from CEO of Micro Strategy. This suit does not bode well for the largest holder of Bitcoin in the world.