WASHINGTON — A D.C. tech billionaire must pay $40 million to resolve a tax fraud lawsuit filed by the Office of the Attorney General back in 2022. The outcome is the largest income tax fraud recovery in District history, the attorney general's office announced Monday.
Michael Saylor and his company MicroStrategy, Inc. were the subject of the lawsuit, which detailed how he pretended to live in Florida or Virginia, despite calling the District home since at least 2005. He lived in a 7,000-square-foot penthouse in Georgetown and docked multiple yachts in Washington Harbor. The suit sought to recover taxes failed to pay from 2005 to 2020.
As part of his fraudulent tax avoidance scheme, Saylor enlisted the assistance of his company, MicroStrategy, a technology corporation he founded and led. MicroStrategy employees falsely reported address information on the W-2s the company issued to Saylor and also omitted Saylor’s accurate information from the withholding filings it submitted to the District. Saylor and MicroStrategy knew that these records and statements were false, especially because MicroStrategy employees maintained detailed logs of Saylor’s precise whereabouts throughout much of this period. With its suit, the District sought to collect back taxes, as well as interest and penalties.
The suit was the first of its kind after amendments to the District’s False Claims Act (FCA) expanded OAG’s tax fraud enforcement authority to hold tax cheats fully accountable. The updated law now allows private individuals to file lawsuits on behalf of the District against high-earning companies and individuals who are underpaying or evading taxes.
“Tax cheats are freeloading off the backs of hardworking, law-abiding, tax paying District residents while depriving our city of resources needed for critical programs, including public safety, infrastructure, and education,” said Attorney General Schwalb in a statement. “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. This precedent-setting settlement makes clear that no one in the District of Columbia, no matter how wealthy or powerful they may be, is above the law.”
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