Tag: Indiana

Whistleblower Tax Fraud Lawsuit Against Bitcoin Billionaire Settles for $40 Million

MicroStrategy’s founder is alleged to have falsified tax documents for ten years. The settlement resolves the first whistleblower lawsuit filed under 2021 amendments to the DC False Claims Act.

Key Takeaways
On June 3, the District of Columbia Office of the Attorney General announced the $40 million settlement with Michael Saylor
It is the largest income tax recovery in D.C. history
The settlement, which resolves a qui tam lawsuit filed under the DC False Claims Act, underscores the power of whistleblowers in combatting tax fraud
On June 3, the District of Columbia Office of the Attorney General (OAG) made a landmark announcement. The billionaire founder of MicroStrategy Incorporated, Michael Saylor, settled a tax fraud lawsuit for a staggering $40 million. This case, stemming from a qui tam whistleblower suit filed under the District’s False Claims Act, marks a significant milestone in the fight against tax fraud. The OAG declared this as the largest income tax recovery in D.C. history, underscoring the importance of this case.

The DC False Claims Act
This settlement is not just a victory for the District but also a testament to the power of whistleblowers. Under the 2021 extension of the D.C. False Claims Act, individuals have the power to file qui tam suits against large companies and suspected tax evaders. The 2021 amendments even offer monetary awards to those who report tax cheats. This settlement, the first settlement under these amendments, serves to put would-be tax cheats on notice.

As the District of Columbia expands its arsenal against tax fraud, other states should take note. The DC False Claims Act, now covering tax fraud, has become a powerful tool in the fight against financial misconduct. With the District joining the ranks of Delaware, Florida, Illinois, Indiana, Nevada, New York, and Rhode Island as states where false claims suits may be brought based on tax fraud claims, the fight against tax cheats looks promising.

The Case Against Saylor
In 2021, unnamed whistleblowers filed a lawsuit against Saylor, alleging that he had defrauded the District and failed to pay income taxes from 2014 to 2020. The OAG independently investigated these claims and filed a separate complaint against Saylor. The District’s lawsuit alleged that Saylor claimed to be a resident of Florida and Virginia to avoid paying over $25 million in income taxes. Another suit was filed against MicroStrategy, claiming it falsified records and statements that facilitated Saylor’s tax avoidance scheme.

The District’s allegations against Saylor paint a picture of a lavish lifestyle. Saylor is accused of unlawfully withholding tens of millions in tax revenue by claiming to live in a lower tax jurisdiction to avoid paying D.C. income taxes. The OAG’s investigation revealed that Saylor owned a 7,000-square-foot luxury penthouse overlooking the Potomac Waterfront and docked multiple yachts in the Washington Harbor. He purchased three luxury condominium units at 3030 K Street NW to combine into his current residence and a penthouse unit at the Eden Condominiums, 2360 Champlain St. NW. The Attorney General compiled several posts from Saylor’s Facebook, in which he boasted about the view from his D.C. residence.

Whistleblower Tax Fraud Lawsuit Against Bitcoin Billionaire Settles For $40 Million

Furthermore, the OAG found evidence that Saylor purchased a house in Miami Beach, obtained a Florida driver’s license, registered to vote in Florida, and falsely listed his residence on MicroStrategy W-2 forms. Attorney General Brian L. Schwalb stated, “Saylor openly bragged about his tax-evasion scheme, encouraging his friends to follow his example and contending that anyone who paid taxes to the District was stupid.”

The lawsuits allege that records from Saylor’s security detail provide Saylor’s physical location and travel from 2015 to 2020 and show that across six years, Saylor spent 449 days in Florida and 1,397 days in the District. Saylor allegedly directed MicroStrategy employees to aid his scheme to avoid paying District income taxes. The District claims that for the last ten years, MicroStrategy has falsely reported its income tax exemption on Saylor’s wages, claiming he was tax-exempt due to his residential status.

Saylor agreed to pay the District $40 million to resolve the allegations against him and MicroStrategy.

A copy of the settlement can be found here.

Copyright Kohn, Kohn & Colapinto, LLP 2024. All Rights Reserved.

by: Whistleblower Law at Kohn Kohn Colapinto of Kohn, Kohn & Colapinto

For more on Whistleblowers, visit the NLR Criminal Law / Business Crimes section.

Wendy’s E. Coli Outbreak Lawsuits

Health Department officials are investigating over one hundred cases of E. coli poisoning in Michigan, Ohio, Indiana and Pennsylvania. People have been diagnosed with food poisoning in Michigan, Ohio, Pennsylvania, and Indiana. The majority of these people claim that they ate sandwiches topped with lettuce at a Wendy’s Restaurant within the week before their food poisoning diagnosis.

Public health officials in Michigan have confirmed 43 cases of E. Coli that match the strain in a multi-state outbreak. A number of similar cases have been identified in Ohio. The specific source of the food poisoning has not been officially determined, but one possible source is romaine lettuce used to top hamburgers and sandwiches at Wendy’s restaurants.

The illness onset dates range from late July through early August 2022. The sickness and harm have ranged from mild to very severe. Many victims have required extensive hospitalization and medical care. Four cases of hemolytic uremic syndrome (HUS) have been diagnosed and suspected to be related to the contaminated lettuce at Wendy’s Restaurants.

  • E. Coli outbreak cases have been reported in the following counties: Allegan, Branch,Clinton, Genesee, Gratiot, Jackson, Kent, Macomb, Midland, Monroe, Muskegon, Oakland, Ogemaw, Ottawa, Saginaw, Washtenaw, and Wayne and the City of Detroit. Public health departments in those counties are closely monitoring patients and working hard to determine the source of the poisoning.

E. coli is a bacterium that lives in the digestive tracks of animals and humans. Most varieties are harmless, but some can cause severe illness. Common sources of E. coli include:

  • Raw milk or dairy products that are not pasteurized.
  • Raw fruits or vegetables, such as lettuce, that have come into contact with infected animal feces.

Symptoms of E. Coli poisoning are very serious. They include severe stomach cramps, diarrhea, and vomiting. Some people experience high fevers and many develop life-threatening conditions.

E. coli infections often require hospitalization and expensive medical care, the damages from this food poisoning can be extensive.

The Wendy’s food poisoning claims are just at their initial stages.  Very few lawsuits have been filed to date, but it is expected dozens will be filed in courthouses shortly.  At this time, there are no reported Wendy’s food poisoning settlements.

In general, food poisoning settlements include money payment for pain and suffering, mental anguish, and the physical injuries caused by the food contamination. In addition, claims for economic losses and damages are also demanded in a food poisoning lawsuit. These are financial losses and include payment of medical bills and expenses, as well as lost wages and income resulted from missed time at work.

If you ate food at a Wendy’s Restaurant that contained romaine lettuce in July or August and were diagnosed or hospitalized with E. coli poisoning, you may benefit from speaking to a food poisoning attorney.

Article By Lawrence J. Buckfire of Buckfire Law

For more personal injury legal news, click here to visit the National Law Review.

Buckfire & Buckfire, P.C. 2022

Indiana Becomes the First "Right-to-Work" State in the Rust Belt

The National Law Review recently published an article regarding Right-to-Work by Lisa Carey-Davis of Schiff Hardin LLP:

Indiana Governor Mitch Daniels signed the Right-to-Work Act, making Indiana the first Rust Belt state — and the first state in more than ten years — to adopt right-to-work legislation. With this law, Indiana joins 22 other states, mostly in the southern and western United States, that prohibit employers from requiring employees to become or remain union members and to pay dues or fees to the union as a condition for getting — and keeping — their jobs.

The Impact of the New Law in Indiana and Beyond

Supporters of the new law contend that because it offers employers “more flexibility and lower hiring costs,” more businesses will now choose to call Indiana home. Republican House Speaker Brian Bosma declared that the Right-to-Work Act “announces, especially in the Rust Belt, that we are open for business.”

Some suggest that other Rust Belt states may soon follow Indiana’s example. State Representative Jerry Torr, who sponsored Indiana’s bill, has predicted that two of Indiana’s more heavily unionized neighbors — Michigan (19%) and Ohio (14%) — will “fall like dominoes” in the wake of Indiana’s decision because “they will have to in order to compete.” Mike Shirkey, a Republican state representative from Michigan, admitted that he was disappointed that Indiana beat Michigan to the punch, adding “now a border state is going to establish a leverage position in being attractive to businesses.”

Currently, roughly 11% of Indiana’s workforce is unionized, primarily in the auto and steel industries. If history is any indication, that number may soon decline. On average, right-to-work states have significantly lower rates of unionization than states without such laws. In 2010, for example, the average rate of unionization was seven percent in right-to-work states, while the average in the rest of the states was more than double at 15%.

The Right-To-Work Act was passed by Indiana’s Republican-controlled legislature over bitter opposition from Democratic lawmakers, including a walkout by House Democrats that denied Republicans for several weeks the quorum required to take action on the bill. Democrats also proposed an amendment that would have put a Right-to-Work referendum on the November ballot, but that amendment was voted down. Unlike Ohio — where a short-lived statute that stripped public sector employees of collective bargaining rights was struck down last year by voters — ballot initiatives in Indiana must be approved by the legislature and cannot be introduced by voters. Therefore, a referendum vote on Indiana’s new law is unlikely.

What the New Law Means for Indiana Employers

The new law contains a grandfather clause that exempts any collective bargaining agreement already in effect on March 14, 2012. Until those grandfathered contracts expire, employers may continue to abide by and enforce union security provisions contained therein by requiring employees to join unions and to pay dues as a condition of employment.

But contracts “entered into, modified, renewed, or extended” after the new law takes effect on March 14 cannot contain such requirements. Specifically, the law prohibits employers from requiring employees to join or remain members of any labor organization, and from requiring them to pay dues, fees or “other charges of any kind” to such organizations. If a contract violates any of these prohibitions, the entire contract — not just the offending clause — is “unlawful and void” according to the statute. In addition, any Indiana employer that violates the law may be subject to both criminal and civil penalties and may be sued by an individual who claims to have been injured by the employer’s actual or threatened violation of the law.

Employers are not required to inform employees about the change in the law, but some may wish to do so.

© 2012 Schiff Hardin LLP