Michael Saylor is in Hot Water, Charged with Tax Fraud
Michael Saylor, MicroStrategy’s co-founder, has evaded taxes, according to DC authorities.
Michael Saylor, one of the most avid Bitcoin fans out there who recently stepped down as MicroStrategy’s CEO due to high losses, is facing a lawsuit in the U.S. alongside the MicroStrategy company.
According to District of Columbia Attorney General Karl Racine, Michael Saylor evaded $25 million in district taxes thanks to MicroStrategy’s opaque schemes. As a result, the Office is seeking compensation of more than $100 million in unpaid taxes and penalties.
According to the lawsuit, MicroStrategy “had detailed information confirming that Saylor was in fact a DC resident” but chose to turn a blind eye to it. It also states that in 2014, MicroStrategy’s then-chief financial officer reportedly confronted Saylor about his alleged tax evasion and potential repercussions for the company.
As a result, Saylor and MicroStrategy decided to reduce his salary to a nominal $1 in order to lower the risk of authorities discovering the alleged scheme. Meanwhile, Saylor purportedly continued to receive money from “fringe benefits” with a “high cash value,” including the use of the company plane.
In a statement, MicroStrategy said, “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 also responded to the case, saying: “A decade ago, I bought a historic house in Miami Beach and moved my home there from Virginia.” He also added that although MicroStrategy is based in Virginia, Florida is the place where he lives, votes, and reports for jury duty, as “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,” he noted.
Racine’s office states that this is the first suit to be brought under a recently passed law called the False Claims Act, which incentivizes whistleblowers to report cases of tax fraud. It also enables the court to impose penalties up to three times the amount of the taxes unpaid.