The District of Columbia’s attorney general secured a record $40 million payout Monday from a billionaire and his business after officials said the entrepreneur skirted city income taxes by posing as a nonresident.

Attorney General Brian Schwalb said Michael J. Saylor cheated the city out of over $25 million by pretending to live in states such as Florida and Virginia from 2014-20. Florida has no state income tax, and Virginia has lower income taxes than D.C.

The total $40 million owed comes from additional tax dollars D.C. said it lost from 2005-13. The attorney general said Mr. Saylor had been living in a large Georgetown penthouse since at least 2005 and was keeping his yachts at Washington Harbor.

Officials also said Mr. Saylor’s technology company, Virginia-based MicroStrategy, helped in his scheme by falsely reporting the entrepreneur’s residency on tax forms.

Mr. Schwalb said the multimillion-dollar settlement is the largest income tax recovery in D.C. history.

“Tax cheats are freeloading off the backs of hardworking, law-abiding, taxpaying District residents while depriving our city of resources needed for critical programs, including public safety, infrastructure and education,” Mr. Schwalb said in a statement. “Michael Saylor and his company, MicroStrategy, defrauded the District and all of its residents for years. Indeed, 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 attorney general’s office said it opened an investigation into Mr. Saylor after whistleblowers sued the billionaire in 2021 and claimed he was committing tax fraud.

The attorney general said the lawsuit was the first filed under the recently amended D.C. False Claims Act. The law lets whistleblowers report suspected tax evaders who lie about their place of residence.

The investigation pointed to Federal Aviation Administration flight records for Mr. Saylor’s private jet and social media posts to tie the cryptocurrency advocate to D.C., according to the settlement.

Mr. Saylor, who is worth over $4 billion, denied ever living in the city.

“Florida remains my home today, and I continue to dispute the allegation that I was ever a resident of the District of Columbia,” the billionaire told CNBC in a statement Monday. “I have agreed to settle this matter to avoid the continued burdens of the litigation on friends, family and myself.”

• Matt Delaney can be reached at mdelaney@washingtontimes.com.