Washington, D.C. Attorney General Brian Schwalb announced a landmark $40 million settlement for tax fraud recovery with Michael Saylor and his company, MicroStrategy, as per a press release dated June 3.

Schwalb stated:

"Michael Saylor, billionaire tech executive and investor, will pay $40 million to the District in the largest income tax fraud recovery in DC history. Saylor not only violated the law but openly promoted his tax evasion scheme and encouraged others to follow suit."

Despite reaching the settlement, both Saylor and MicroStrategy deny any wrongdoing, attributing the agreement to avoiding further legal entanglements and reducing litigation burdens.

Saylor, a prominent advocate of Bitcoin, holds over 200,000 BTC through MicroStrategy, valued at approximately $14 billion.

Regarding the tax fraud allegations, the settlement pertains to accusations that Saylor evaded over $25 million in income taxes while supposedly residing in Washington, D.C.

The attorney general's office accused Saylor of collaborating with MicroStrategy to submit fraudulent tax documents from 2005 to 2021, falsely claiming residency in Virginia or Florida—states with lower income tax rates.

Schwalb asserted:

"Saylor falsely claimed residency in lower-tax jurisdictions to evade taxes on hundreds of millions of dollars in income, despite living in a 7,000 square foot Georgetown penthouse and docking multiple yachts at Washington Harbour."

Despite the settlement, MicroStrategy's stock performance has remained unaffected. Yahoo Finance data indicates a 7% increase in MSTR shares on the day, trading at $1,615 at the time of the announcement. This positive trend continues for the BTC-related stock, which has seen a 133% rise year-to-date. Additionally, MSTR was recently added to the MSCI World Index, with BlackRock acquiring 4,020 shares valued at approximately $6.1 million.