Washington DC Attorney General Karl Racine has sued tech billionaire Michael Saylor, alleging $25 million in tax evasion.
The lawsuit, officially filed in DC Superior Court on August 22, names both Saylor and his company, MicroStrategy, as defendants. Racine and his office allege that the company, which Saylor co-founded, conspired to help the billionaire businessman in his tax evasion scheme.
Per a report from CNBC, "the AG’s office said it’s seeking to recover a total sum of over $100 million in unpaid taxes and penalties."
The outlet went on to note that stock shares of MicroStrategy were down more than 6% Wednesday afternoon following the court filing. Saylor, who oversaw the company’s bitcoin push, stepped down as CEO in early August.
During his tenure, MicroStrategy spent nearly $4 billion acquiring bitcoin at an average price of $30,700. He has previously been quoted as saying the company's stock is a "bitcoin ETF."
The Washington Post weighed in on Racine's allegations, noting:
[The AG's office indicates] Saylor has for years fraudulently claimed to be a resident of lower-tax jurisdictions despite living in a 7,000-square-foot penthouse on the Georgetown waterfront. The complaint further alleges that MicroStrategy, despite knowing Saylor was a D.C. resident, conspired in the scheme “instead of accurately reporting his address to local and federal tax authorities and correctly withholding District taxes.”
Purportedly, Saylor claimed to primarily reside in Virginia or Florida, rather than Washington DC proper. Florida has no personal income tax, while Virginia's tax rate is quite low.
As part of the lawsuit, Racine and his team included years worth of screenshots from Saylor's personal Facebook page referencing the view from his "Georgetown balcony" and mentioning his "home" in relation to Washington DC.
MicroStrategy released an official statement that was shared by CNBC:
“The case is a personal tax matter involving Mr. Saylor. 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 District of Columbia’s claims against the Company are false and we will defend aggressively against this overreach.”
Saylor himself also released a public statement yesterday, saying:
“A decade ago, I bought an historic house in Miami Beach and moved my home there from Virginia. 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.”
This is the first case to be submitted under the recently-passed Washington DC False Claims Act, which allows the Office of the Attorney General to "bring court actions against those who violate the False Claims Act by making false claims to the District Government for the purpose of improperly obtaining or retaining government funds."
What do you think about the tax fraud allegations against Saylor?
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