“It is never too late to do the right thing.”- US Attorney David Anderson
Robert Smith, the Black billionaire who promised to pay the student loan debt of Morehouse College graduates in 2019, is in deep trouble with the Internal Revenue Service.
According to the Department of Justice, Smith used third party accounts to conceal his income and commit tax evasion from 2000 to 2015. The DOJ stated that Smith, who is the CEO of Vista Equity Partners, intentionally did not report over $200 million of partnership income.
The shocking revelation came after Smith, who is a billionaire and the richest Black man in America, recently entered into a non-prosecution agreement (NPA) with the Department of Justice and the Internal Revenue Service, agreeing to cooperate with federal investigators and pay nearly $140 million in taxes and penalties.
The Justice Department announced on Thursday (Oct 15) that Smith entered the non-prosecution agreement, in which he admitted his involvement in the scheme and agreed to cooperate with the ongoing investigation. The billionaire will also pay back $139 million in taxes in penalties, and he agreed to abandon $182 million in charitable contribution deductions.
“It is never too late to do the right thing,” U.S. Attorney David Anderson said in a statement. “It is never too late, to tell the truth. Smith committed serious crimes, but he also agreed to cooperate. Smith’s agreement to cooperate has put him on a path away from indictment.”
Smith admitted to using third parties to conceal his beneficial ownership and control of the Excelsior Trust in Belize and Flash Holdings, a shell company in order to avoid paying taxes. The billionaire also used the Excelsior Trust and Flash Holdings and their foreign accounts in the British Virgin Islands and Switzerland to hide income earned and distributed to Flash Holdings from private equity funds.
“Smith used millions of this unreported income to acquire and make improvements to real estate used for his personal benefit. Smith admits that, in 2005, he used approximately $2.5 million in untaxed funds to purchase and renovate a vacation home in Sonoma, California,” the Justice Department said in a statement. “In 2010, Smith again used untaxed funds to purchase two ski properties and a piece of commercial property in France. In 2011 and 2012, Smith used approximately $13 million of untaxed funds to build and make improvements to a residence in Colorado and to fund charitable activities at the property.”
According to The Hill, Smith’s case is connected to another billionaire, Robert Brockman, who was charged last week with hiding $2 billion in income from the IRS resulting in the biggest tax fraud case in U.S. history.
In September of last year, Smith donated $34 million to pay off the student loans of Morehouse College’s then-graduating class and set up a foundation to aid students struggling with loans in the future.