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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.
Smith agreed to cooperate with the investigation when he entered a Non-Prosecution Agreement with the Department of Justice pay back $139 million in taxes in penalties and not receive $182 million in charitable contribution deductions.
According to the Department of Justice:
“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. 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 improvement to a residence in Colorado and to fund charitable activities at the property.”
In 2000, Smith formed the Excelsior Trust in Belize and Flash Holdings in Nevis. He used the Excelsior Trust to hide his ownership of Flash Holdings and used Flash Holdings to conceal his interest payments from private equity investments.
“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.”
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