Bitcoin Billionaire Michael Saylor Reaches $40 Million Settlement in DC Tax Fraud Case

By Trisha Andrada

Jun 04, 2024 03:31 AM EDT

Michael Saylor, a billionaire bitcoin investor and founder of MicroStrategy, will pay $40 million to resolve a tax fraud action that Attorney General Brian Schwalb of Washington, DC, launched.

In a news statement announcing the settlement on Monday, June 3, Schwalb said that Saylor brazenly boasted about his tax-evasion plan, urging his pals to do the same and claiming that anybody who paid taxes to the District was "stupid."

Billionaire Bitcoin Investor Accused of Tax Fraud

In a civil case filed in 2023, Schwalb said that Saylor allegedly avoided paying over $25 million in income taxes to the District of Columbia between 2005 and 2021 by pretending to be a citizen of jurisdictions with lower taxes, such as Virginia and Florida.

The suit claims that Saylor resided in a penthouse apartment in Washington, DC, with a view of the Georgetown shoreline and the Potomac River, where he kept his sailboats.

As part of his tax evasion case, the attorney general filed charges against Saylor and MicroStrategy, alleging that the latter assisted the former in hiding his DC residence from the government.

There were also allegations that MicroStrategy did not pay the business taxes that a company hiring DC residents, including Saylor, is supposed to pay.

Karl Racine, the former DC attorney general, filed the first lawsuit against Saylor in 2022. A whistleblower complaint filed in 2021 said that Saylor had engaged in tax evasion and boasted about it to his acquaintances, which led to the commencement of this case.

On the other hand, Saylor reaffirmed his Florida residency and rejected the attorney general's claims. "I continue to dispute the allegation that I was ever a resident of the District of Columbia," he told CNBC.

Who Is Michael Saylor?

Saylor took MicroStrategy public on the Nasdaq in 1998 after founding Virginia's software consulting and innovative data analytics startup in 1989. He moved the business into the cryptocurrency market in 2020 and has accumulated crypto worth billions of dollars since then.

He was the firm's CEO until 2022 when he stepped down to become the executive chairman.

Forbes estimates that Saylor is worth about $4.6 billion. By February, he had amassed 2.4 million MicroStrategy shares, representing a 13% ownership interest in the firm.