Remember last year when billionaire Robert Smith told students graduating from Morehouse College he was going to pay their student loans? Remember how good that felt to see? Well, you might want to hold on to that feeling because it turns out dude committed tax fraud.
According to the Hill, Smith admitted to participating in a scheme that used offshore bank accounts and trusts to avoid paying taxes for the last 15 years. Smith entered a non-prosecution agreement with the Department of Justice where he agreed to cooperate with an investigation into the scheme. He has agreed to pay $139 million in taxes and penalties and forfeit $182 million in charitable donations.
“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.”
From the Hill:
Smith, the CEO of Vista Equity Partners, admitted to using third parties to conceal his beneficial ownership and control of the Excelsior Trust in Belize and Flash Holdings, a shell company. He formed these entities so that he could use them to avoid paying taxes.
Smith also admitted to using 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.
The billionaire, who lives in Austin, Texas, did not report over $200 million of partnership income as a result of the scheme.
I’m so conflicted, y’all.
The part of me that’s like “capitalism will be the death of this world if we allow the unchecked pursuit of profit to outweigh basic human rights and the survival of our ecosystem” thinks this is a good thing. I’m glad a billionaire was punished for being greedy...but-
The latent hotep in me, the Dr. Umar to my Dr. Jekyll if you will, is like hold up-you’re telling me a Black man is being punished for doing what probably every rich white person, including our allegedly wealthy president, has done since the history of money?
So the Justice department can prosecute him for violating finance laws but when it comes to Big T and all of them, their hands are tied?
If I may quote an ex-girlfriend, I just think that’s kind of funny is all.
Smith mainly spent the unreported income on various commercial and residential properties throughout the world. He admitted to using $2.5 million of unreported income in 2005 to cop a vacation home in Sonoma, Calif. The year 2010 saw him buy two ski properties as well as a commercial property in France.
From 2011-2012, he used $13 million on renovations to a property in Colorado and to fund charitable events at the residence. What was probably one of his most notable expenses was the $34 million he donated to Morehouse to pay off student loans. Considering the donation was already set up, it’s unclear how, if at all, this would affect the students who were eligible for the donation.
While I did have my moment of righteous hotepery, a white man was actually charged in this case. Smith’s case is connected to Robert Brockman’s, another Texas billionaire. Brockman was charged with hiding $2 billion in income, the largest tax fraud case in history according to the IRS.