Michael Saylor, co-founder of the world’s largest corporate Bitcoin holder MicroStrategy, has been accused of tax evasion to the sum of US$25mln by District of Columbia’s attorney general Karl Racine.
Relaying the details of the complaint over Twitter (NYSE:TWTR), Racine stated that the lawsuit marks the first brought under District of Coulmbia’s amended False Claims Act, which encourages whistleblowers to report residents who evade tax laws by misrepresenting their residence.
NEW: Today, we’re suing Michael Saylor - a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes - for tax fraud.— AG Karl A. Racine (@AGKarlRacine) August 31, 2022
“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 stated.
The complaint cites both Saylor and MicroStrategy Inc., and accuses Saylor of fraudulently claiming to reside in lower-tax jurisdictions while living in a luxury penthouse
on the Georgetown waterfront and docking multiple yachts on the District’s Potomac riverfront.
Saylor founded software company MicroStrategy in Delaware in the 1980s before establishing headquarters in Virginia.
The lawsuit provides evidence that MicroStrategy willingly conspired with Saylor to avoid District of Columbia’s taxes by purporting to reside in either Virginia or Florida (two states with materially lower tax rates).
The complaint alleges: “Since at least 2012, Saylor has bragged to his confidants about his successful plan to create the illusion of residing in Florida in order to evade the District’s personal income taxes.”
A series of Facebook (NASDAQ:META) posts has been submitted in support of these claims.
Michael Saylor stepped down as MicroStrategy’s chief executive officer this August but stayed on as executive chair “to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives” as he stated at the time.
As head of MicroStrategy, Saylor stuffed company coffers with a total of 129,699 BTC following his most recent purchase on June 29.
He made his first Bitcoin purchase on August 11 2020, acquiring 21,454 BTC for US$11,652 a piece.
Quoted on NASDAQ, shares in the company plunged when the cryptocurrency market crashed in May- year to day, MSTR is down over 57% as of September 1.