Michael Saylor and Tysons, Virginia-based MicroStrategy, the company he co-founded, will pay $40 million to resolve a tax fraud lawsuit filed by the D.C. Office of the Attorney General two years ago.
The suit, brought by former D.C. Attorney General Karl Racine in 2022, alleged Saylor illegally evaded more than $25 million in District taxes over the course of 15 years by claiming to be a Florida resident, despite residing full-time in a 7,000-square-foot penthouse on the Georgetown waterfront.
Florida has no personal income tax.
The suit also accused Saylor of docking multiple yachts on the District’s Potomac riverfront since 2005.
MicroStrategy was also named in the suit, accused of conspiring to assist Saylor in evading income taxes in the District.
The settlement was announced Monday morning by Attorney General Brian Schwalb.
It is the first lawsuit settled under the authority of the District’s recently-passed False Claims Act, which encourages whistleblowers to report tax evaders who misrepresent their residence. The law permits a court to fine a proven tax evader up to three times the amount of unpaid taxes. It is the largest income tax recovery settlement in District history.
“Michael Saylor and his company, MicroStrategy, defrauded the District and all of its residents for years. Indeed, Saylor openly bragged about his tax-evasion scheme, encouraging his friends to follow his example, and contending that anyone who paid taxes to the District was stupid,” Schwalb said in a statement.
In agreeing to the settlement, Saylor and MicroStrategy admitted no liability or wrongdoing.
Following the whistleblower report in 2021, the D.C. OAG opened an investigation, which collected evidence citing location-specific social media posts and FAA flight records showing when his company’s private jet left and returned to D.C. area, among other evidence.
Forbes estimates Michael Saylor’s net wealth at $4.6 billion.
Saylor resigned as MicroStrategy CEO in 2022 to focus on increasing the company’s Bitcoin investments, now one of the world’s largest holders of the cryptocurrency.
A copy of the settlement is online.
