The Attorney General of Washington, DC, Karl A. Racine, has announced that he’s suing bitcoin evangelist Michael Saylor and his publicly listed company, MicroStrategy, for fraud and tax evasion.
Racine alleges that Saylor dodged city income taxes by misrepresenting his residence. Although Saylor claimed to live in Florida, the Attorney General alleges that he actually spent substantial time in Washington DC and evaded his tax obligations.
Saylor claims to live in states like Virginia and Florida, which have lower or no state income taxes. However, he’s also referenced views from his penthouse apartment in Georgetown, a neighborhood in DC that overlooks the ocean. He’s also stayed on his yacht on the Potomac River in DC while renovating his apartment.
Michael Saylor’s fraud lawsuit could take over $100 million
The lawsuit claims that Saylor owes $25 million in taxes but he could also face so-called “trebled damages,” plus other fines, interest, and fees if he’s found liable for fraud or tax evasion. That could bring the total he owes to over $100 million, all dependent on the outcome of the lawsuit and any possible sentencing outcomes.
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The Attorney General also alleges that MicroStrategy possessed detailed information on Saylor’s residence but withheld that information, which assisted Saylor in his alleged tax evasion. The Attorney General claims that MicroStrategy’s CFO was aware of Saylor’s tax evasion as early as 2014.
The lawsuit also describes an alleged confrontation between MicroStrategy’s CFO and Saylor in which Saylor agreed to limit tax liability to the company by reducing his salary to $1 per year. Saylor also allegedly benefited from perks like the use of MicroStrategy’s company plane.
Racine brought the lawsuit under DC’s False Claims Act, which enables whistleblowers to pursue lawsuits against suspected tax evaders. The act passed in 2011 and at a federal level, the US has its own version of the False Claims Act which passed in 1863.
A whistleblower sent a tip to the Attorney General’s office about these tax concerns. In the opinion of the Attorney General, Saylor filed misleading W-2s using his Florida address and began failing to pay DC income taxes starting in 2005.
Saylor has prior experience with fraud litigation. In 2000, he agreed to pay fines to settle fraud charges by the SEC that he committed civil accounting fraud at MicroStrategy.
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Source: https://protos.com/michael-saylor-called-tax-cheat-after-spending-too-much-time-in-dc/