Black Billionaire Robert F. Smith Admits To Tax Fraud, Earning More Than $200 Million in Unreported Income

Black Billionaire Robert F. Smith Admits To Tax Fraud, Earning More Than $200 Million in Unreported Income https://ift.tt/eA8V8J

Robert F. Smith, the billionaire who announced he would pay off the debt of students at Morehouse College last fall, admitted to a scheme to conceal income and evade taxes by using offshore trusts and bank accounts for 15 years.

The Justice Department announced Thursday that Smith, the chairman of Vista Equity Partners L.L.C., entered a non-prosecution agreement. As part of the agreement, Smith admitted his involvement in the scheme, will cooperate with federal authorities, pay back $139 million in taxes in penalties, and 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 to The Hill. “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 he used third parties to conceal his beneficial ownership and control of the Excelsior Trust in Belize and Flash Holdings, a shell company Smith formed to avoid paying taxes. Smith also admitted he used Excelsior Trust and Flash Holdings foreign accounts in the Virgin Islands to hide income earned and distributed to Flash Holdings from private equity funds.

As a result of the scheme, Smith made more than $200 million in unreported income. The billionaire’s expenditures during the scheme include a $2.5 million vacation home in California he bought in 2005, two ski properties and a piece of commercial property in France he purchased in 2010, and spending $13 million in 2011 and 2012 to make improvements to a house in Colorado and fund charitable events at the property.

Smith has been known to donate huge amounts of money to philanthropic and Black causes. He gave $1.5 million to Morehouse College, $50 million to Cornell’s Engineering School, and $20 million to the Smithsonian National Museum of African American History and Culture. In September 2019, Smith donated $34 million to pay off the student debt of its 2019 graduating class and set up a foundation to aid Morehouse students struggling with student loans in the future.

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