the lawsuit, which Racine presented on August 2. 22 in DC Superior Court, alleges that Saylor has fraudulently claimed for years that she is a resident of lower tax jurisdictions despite living in a 7,000-square-foot penthouse on the Georgetown waterfront. The complaint further alleges that MicroStrategy, despite knowing Saylor was a DC resident, conspired in the scheme “instead of accurately reporting Saylor’s address to local and federal tax authorities and properly withholding District taxes.” Both Saylor and MicroStrategy released statements Wednesday, denying the allegations in the lawsuit.
The lawsuit alleges that Saylor purchased the Georgetown property in 2005 before purchasing two adjoining penthouses, combining them into a single residence Saylor calls “Trigate,” and also purchased a penthouse in Adams Morgan. Starting in 2012, according to the lawsuit, Saylor bought a home in Miami Beach, obtained a Florida driver’s license and registered to vote there despite living primarily in DC The lawsuit alleges he did not pay DC income taxes on no time between 2005 and 2021, despite social media posts over the years indicating that he lived in DC and considered it home.
“Since at least 2012, Saylor has bragged to confidants about his successful scheme to create the illusion of residing in Florida in order to evade the District’s personal income taxes,” the complaint says. The lawsuit alleges that MicroStrategy abetted the fraud by agreeing to list Saylor’s residence on federal tax forms as his home in Florida, despite knowing that he lived in DC, “actively helping Saylor avoid his tax liability.” pay taxes owed to the District. (Florida has no state individual income tax.)
Saylor said in his statement that he bought the Miami Beach house a decade ago after moving from Virginia.
“Although MicroStrategy is based in Virginia, Florida is where I live, vote, and have served on the jury, and it is at the center of my personal and family life,” he wrote. “I respectfully disagree with the position of the District of Columbia, and we look forward to a fair resolution in court.”
Saylor founded MicroStrategy in 1998 and served as CEO until earlier this month, when the publicly traded company announced he would be taking on a new role as CEO. In a Aug. two Press release In announcing the leadership change, MicroStrategy said Saylor would also remain chairman of its board of directors.
MicroStrategy in its own statement denied the allegations and vowed to “aggressively defend against this overreach.”
“The case is a personal tax matter involving Mr. Saylor,” the statement said. “The Company was not responsible for his day-to-day affairs and did not monitor his individual tax responsibilities. The Company also did not conspire with Mr. Saylor in the compliance with their personal tax responsibilities.
Racine’s office said the lawsuit was filed under the city’s jurisdiction. recently expanded False Claims Act, which the DC Council amended last year to include tax-related issues and encourages whistleblowers to identify tax fraud. Racine said the law also allows the court to impose a penalty of up to three times the amount of evaded taxes, and that among the unpaid income taxes and other penalties his office seeks to recover from Saylor and MicroStrategy, damages in the case could amount to more than $100 million.
The lawsuit builds on a similar complaint filed against Saylor by whistleblowers in DC Superior Court last year, which was unsealed Wednesday. Racine’s office said it independently investigated the tax fraud allegations and intervened in the whistleblower’s complaint, filing its own lawsuit against Saylor and MicroStrategy.
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