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Michael Saylor and the company he founded, MicroStrategy, face legal action in Washington, D.C. over tax fraud. 

On August 31, Attorney General Karl Racine tweeted that D.C. is suing the tech executive:

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

District authorities accuse Saylor of evading over $25 million in D.C. taxes by misrepresenting his place of residence as either Florida or Virginia instead of the U.S. capital, due to the lower tax rates in those states compared to the District. MicroStrategy is based in Tysons Corner, Va. 

“Defendant Saylor knowingly avoided income taxes he owed to the District by fraudulently claiming to be a resident of other, lower-tax jurisdictions while maintaining his domicile and place of abode in the District, including living in a luxury penthouse the Georgetown waterfront and docking multiple yachts on the District’s Potomac riverfront from 2005 to present,” the complaint filed Aug. 22 but made public on Aug. 31 by Racine alleges. The filing cites social media posts by Saylor in Washington as part of its supporting evidence.

Racine’s office also names MicroStrategy as a co-defendant, claiming that the company helped conceal Saylor’s place of residence for tax purposes, and that MicroStrategy’s chief financial officer documented the number of days Saylor spent either in Florida or D.C. 

“Sometime thereafter in 2014, the MicroStrategy CFO, brought the issue of Saylor’s fraudulent evasion of District taxes to Saylor as a potential source of liability for the company,” the complaint reads.  

In a Wednesday press release, Racine’s office characterized the complaint as, “the first suit brought under the authority of the District’s recently passed False Claims Act that encourages whistleblowers to report instances where DC residents evade the District’s tax laws by misrepresenting their residence.” 

The suit asks the court to award the District Saylor’s unpaid tax liability as well as “treble damages and civil penalties.” 

Saylor stepped down from his position as CEO of MicroStrategy at the beginning of August following underwhelming returns on the company’s major bet on Bitcoin. Saylor said he would move to an executive chairman position,  “to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives.” 

MicroStrategy did not immediately respond to a request for comment.  

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