Former MicroStrategy CEO Michael Saylor has suffered a big blow as Judge Yvonne Williams rejected his appeal against tax evasion claims. Although, the court did dismiss the allegations that the company and Saylor had conspired to violate the False Claims Act of Washington, D.C.
In April 2021, disclosures by whistle-blowers alleged that Saylor was avoiding tax in the District of Columbia (D.C) by pretending to be resident in Florida.
Former D.C. Attorney General Karl A. Racine brought the case against Saylor based on these allegations. Racine asserted that Saylor failed to pay city income taxes between 2005 and 2021 while living a playboy lifestyle in the city.
DC has a relatively new law called the False Claims Act, which allows citizens to file lawsuits against alleged tax dodgers. Uniquely, this allows whistle-blowers to keep a portion of any proceeds recovered.
The now partially-dismissed $150m lawsuit could have seen the whistle-blower pocket as much as $25m from the case.
In the whistle-blower’s disclosures, it’s alleged that Saylor bought up three prestigious Georgetown penthouses, which were then combined into a massive 7,000sq ft luxury apartment.
While claiming to have his personal home in Florida, it is alleged that Saylor resided almost full-time at the address. This is evidenced by the near nightly parties he threw on the multiple yachts he keeps in the city.
It is rumored that Saylor would boast that D.C. residents were fools for not maintaining a tax base in Florida, which has 0% income tax.
The now famous Bitcoin Maxi denies the allegations categorically.
“[I] continue to respectfully disagree with the District’s position on the remaining claims,” said Saylor.
“[Florida is] the center of my personal and family life.”
Indeed, with DC Superior Court Judge Yvonne Williams now dismissing more than half the case against Saylor, it seems the first-ever courtroom test of the strange DC False Claims Act could be doomed to fail.
Williams ruled that the District can still pursue part of the claim relating to $25m in unpaid taxes, alongside interest and penalties.
Speaking on the ruling, D.C. Attorney General Brian L. Schwalb implied that the District could be considering an appeal.
“The Office of Attorney General will hold accountable any tax-evading individuals or businesses, which includes the pursuit of the claims involving Mr. Saylor’s unfulfilled tax burden,” said Schwalb.
“With respect to the decision on the False Claims Act claims, we are considering our legal options.”
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