Robert F. Smith made headlines in 2019, when he announced that his family would pay off student loan debt for the entire graduating class at Morehouse College. Now the billionaire businessman is back in the news for alleged tax evasion.
Federal prosecutors announced Thursday that Smith will pay $139 million in back taxes and penalties as part of a non-prosecution agreement with the Department of Justice. Smith additionally agreed to cooperate with ongoing investigations, the U.S. Attorney’s Office in the Northern District of California said in press release.
“It is never too late to do the right thing,” said U.S. Attorney David L. Anderson. “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, 57, is founder and CEO of Vista Equity Partners, a software and technology investment firm with $46 billion in assets.
Following a lengthy investigation, federal prosecutors said he concealed income and evaded taxes by forming Excelsior Trust in Belize, and using foreign trusts and offshore bank accounts in the British Virgin Islands and Switzerland to hide money from the Internal Revenue Service.
Smith avoided prosecution by cooperating in a case against Houston businessman Robert T. Brockman, who was hit with a 39-count indictment Thursday for allegedly scheming to hide $2 billion in income from the IRS.
As for Smith, the feds said he admitted to using approximately $2.5 million in untaxed funds in 2005, to purchase and renovate a vacation home in Sonoma, California. In 2010, prosecutors allege he used untaxed funds to purchase two ski properties and a commercial property in France. In 2011 and 2012, the feds said he used another $13 million of untaxed funds to build and make improvements on a residence in Colorado.
Under the terms of his deal, prosecutors said Smith will continue cooperating in other related cases.
Additionally, Smith agreed to pay approximately $56 million in taxes and penalties and another $82 million in penalties for allegedly concealing offshore bank accounts. In total, Smith will pay more than $139 million in taxes and penalties, according to prosecutors.
Bloomberg News reported in an August article that Smith had landed in the crosshairs of the IRS, and was desperately trying to avoid prosecution.