Washington, D.C. Attorney General Brian Schwalb announced a historic $40 million tax fraud settlement with Michael Saylor and his company MicroStrategy, according to a press release published on June 3.

Schwalb noted:

“Billionaire tech executive and investor Michael Saylor will pay a $40 million fine to Washington, D.C., the largest individual income tax fraud recovery in District history. Saylor did not break any law, but openly flaunted his tax evasion and induced others to do the same.”

Despite the settlement, Saylor and MicroStrategy denied any wrongdoing and said the agreement was signed to avoid further legal battles and reduce the burden of litigation.

Saylor is a staunch supporter of Bitcoin, and MicroStrategy holds more than 200,000 BTC, worth approximately $14 billion.

Tax fraud

The settlement stems from allegations that Saylor evaded more than $25 million in income taxes while living in Washington, D.C.

The attorney general’s office alleges Saylor conspired with MicroStrategy to file false tax documents between 2005 and 2021, falsely reporting that he lived in Virginia or Florida, states with lower tax rates.

However, Schwalb claimed that Saylor lived in "a 7,000 square foot upper floor apartment and had multiple yachts moored in Washington Harbor," and further asserted:

"Saylor is accused of living a lavish lifestyle in Washington, D.C., while illegally claiming to reside in a lower-tax area in order to evade tax liability on hundreds of millions of dollars in income."

MSTR Stock Rises

Meanwhile, shares of the bitcoin development company (MicroStrategy) (MSTR) were unaffected by the settlement.

MSTR stock is up about 7% on the day, trading at $1,627 at press time, according to Yahoo Finance. This continues a positive trend that has seen Bitcoin-related stocks gain 133% so far this year.

It is worth noting that the company's stock was included in the MSCI World Index and BlackRock, the world's largest asset management company, purchased 4,020 shares of MSTR stock, worth about $6.5 million. #MicroStrategy #MSTR #MichaelSaylor

Conclusion:

Despite facing charges of tax fraud, Michael Saylor and MicroStrategy reached a settlement by paying a $40 million fine while denying all wrongdoing. However, the incident did not affect the positive performance of the company's stock, and MSTR stock continued to rise after the settlement, showing the market's confidence in the company.

At the same time, as a firm holder of Bitcoin, MicroStrategy's investment strategy and market performance deserve investors' attention.