Michael Saylor, CEO of MicroStrategy.
Valerie Plesch | Bloomberg | Getty Images
Billionaire Bitcoin investor Michael Saylor and the company he founded, Microstrategywill pay $40 million to settle a tax fraud lawsuit brought by the Washington, D.C., attorney general, the AG’s office said Monday.
Between 2005 and 2021, Saylor allegedly evaded more than $25 million in income taxes in the District of Columbia by posing as a resident of lower-tax states such as Florida and Virginia, Attorney General Brian Schwalb said in a 2023 civil lawsuit .
Saylor’s actual home, the lawsuit says, was a luxury penthouse apartment in Washington overlooking the Georgetown waterfront, where he kept his yachts on the Potomac River.
“Saylor openly bragged about his tax evasion scheme, encouraged his friends to follow his example, and claimed that anyone who paid taxes to the county was stupid,” Schwalb said in a statement.
Saylor founded Virginia-based MicroStrategy in 1989 as a software consulting firm and pioneering data analytics company and took the company public on Nasdaq in 1998. He served as CEO of MicroStrategy until 2022 and then assumed the role of Executive Chairman.
In 2020, Saylor moved the company into the cryptocurrency market and has since amassed billions of dollars worth of cryptocurrencies.
As of Monday, Saylor’s net worth was about $4.9 billion, according to Forbes. He also owned 2.4 million shares of MicroStrategy stock, or a 13% stake in the company, as of February.
MicroStrategy shares closed at $1,524.49 per share on Friday.
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The D.C. attorney general accused both Saylor and MicroStrategy of tax evasion, alleging that the company helped its founder hide his D.C. residency to avoid paying higher income taxes.
MicroStrategy also allegedly failed to pay the corporate taxes required for a company that employs Washington, D.C. residents, of which Saylor was just one of several.
MicroStrategy did not immediately respond to requests for comment.
The original lawsuit against Saylor was filed in 2022 by former D.C. Attorney General Karl Racine. The trigger was a 2021 whistleblower lawsuit alleging that Saylor cheated on his taxes and bragged about it to his friends.
This lawsuit tipped off the Attorney General’s Office, which later conducted its own investigation and filed a civil lawsuit.
The case against Saylor was the first brought in the District of Columbia under an updated version of the False Claims Act. The update expanded the attorney general’s tax enforcement powers and incentivized whistleblowers to come forward by offering rewards of up to 25% of county profits for successful cases.
According to the attorney general’s office, Saylor had lived in the same luxury apartment building overlooking Georgetown’s waterfront since at least 2005.
From 2006 to 2008, Saylor purchased three luxury condominiums in Washington, D.C., which he later converted into a single complex he called “Trigate.” During renovations from 2011 to 2015, Saylor reportedly lived between his yachts, his penthouse and another apartment in the Adams Morgan neighborhood of Washington.
The civil lawsuit cited several Facebook posts on Saylor’s account that dated back to the time of the home renovation.
“I look wistfully at my future home as I wait for James to crack the whip on the developers and drive the cats,” Saylor wrote in a 2012 post. “I wonder if Tony Stark would be so patient…”
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2024-06-03 14:21:18
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