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MicroStrategy President Michael Saylor charged with tax evasion by DC AG


Michael Saylor, president and CEO of MicroStrategy, first got into bitcoin in 2020, when he decided to start adding the cryptocurrency to MicroStrategy’s balance sheet as part of its management strategy. unofficial treasury.

Eva Marie Uzcategui | Bloomberg | beautiful pictures

DC Attorney General Karl Racine has accused MicroStrategy co-founder and executive chairman Michael Saylor of evading $25 million in County taxes in a new lawsuit filed Wednesday.

The litigation also has a name MicroStrategy as the defendant. Racine accused the company of conspiring to help Saylor evade taxes. AG’s office says it is seeking to recover a total of more than $100 million in unpaid taxes and penalties.

Shares of MicroStrategy fell more than 6% Wednesday afternoon on the news. Saylor, who oversaw the company’s push into bitcoin, has resigned as CEO in the first day of this month. Under his leadership, MicroStrategy spent nearly 4 billion dollars repurchase bitcoin at an average price of $30,700, and he has said that he considers the company’s stock a kind of bitcoin ETF.

Saylor allegedly claimed to reside in Virginia or Florida, where personal income tax rates are lower or none, while actually living in a number of different homes around DC, including an apartment. attic in DC’s Georgetown neighborhood or on his yacht on the banks of the Georgetown or Potomac Rivers while the Apartment was being renovated, according to the lawsuit. The lawsuit includes several screenshots of posts appearing from Saylor’s Facebook page dating back several years and referencing views from his “Georgetown balcony” and discussing his “home” in when tagging Washington, DC.

MicroStrategy allegedly “had detailed information confirming that Saylor was in fact a DC resident,” according to a press release, but chose to withhold that information.

Around 2014, AG’s office claimed in the lawsuit that the then-CFO of MicroStrategy confronted Saylor about his alleged tax evasion as a potential liability to the company. Saylor and MicroStrategy eventually reached an agreement where Saylor’s salary would be reduced to a nominal dollar, the lawsuit claims, to reduce the risk that authorities would discover the alleged scheme. However, AG alleges, Saylor continued to benefit from “margin benefits” with “high cash value,” such as the use of company aircraft.

According to Racine’s office, the lawsuit is the first to be brought under a newly passed law called the False Complaints Act. District law encourages whistleblowers to report tax fraud and allows courts to fine up to three times the amount of tax evasion, according to the AG’s office.

The District’s lawsuit follows a separate complaint filed by accusers against Saylor in April 2021, alleging that he failed to pay income taxes between 2014 and 2020. The lawsuit has been sealed but made public on Wednesday.

AG’s office said it independently investigated the whistleblower incident and found that MicroStrategy had incorrectly filed a W-2 with his Florida-based address and failed to withhold taxes that were believed to be due. debt to the District. The new lawsuit alleges Saylor failed to pay the income taxes he owed to the District from 2005 onward.

MicroStrategy did not immediately respond to CNBC’s request for comment.

MacKenzie Sigalos contributed to this story.

WATCH: Watch CNBC’s full interview with MicroStrategy CEO Michael Saylor at Bitcoin 2022



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