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Wednesday, October 14, 2020

Billionaire Robert Smith reaches $140 million tax settlement with DOJ

The businessman allegedly failed to pay taxes on about $200 million in assets.

Billionaire Robert Smith has reached a $140 million settlement with the DOJ as part of a four-year criminal tax investigation. 

Smith, who famously pledged to pay off the debt of Morehouse College students last year, must also acknowledge misconduct related to tax crimes and assets held in offshore tax structures.

theGRIO previously reported, Smith allegedly failed to pay taxes on about $200 million in assets that moved through offshore accounts tied to Robert Brockman, a Houston software businessman. 

Brockman reportedly gave Smith $1 billion in 2000 to start his equity firm, funds that originated from a charitable trust based in Bermuda.

Read More: Did Robert F. Smith use Black America?

Smith has reportedly been on the radar of the IRS since 2014, Bloomberg reported. That year, the billionaire reportedly approached the federal agency seeking amnesty from prosecution under a program to Americans who did not report offshore assets. The IRS, however, declined Smith’s request. The agency reportedly turns down taxpayers if it already knew they had not reported offshore accounts.

In September 2019, Smith’s Vista Equity Partners was hit with a lawsuit that accused it of self-dealing, according to the New York Post. Kurt Lauk, a former executive at Audi, claimed he got booted from the board at the automotive software firm Solera Holdings when he brought up the concern. The suit accused Vista of using Solera as a “personal piggy bank” to bail out the firm’s failed investments in other companies. The suit also accused Vista of misleading its investors, to which Smith and the firm denied.

Read More: Billionaire Robert Smith investigated by feds for possible criminal charges

Smith cooperated with the Justice Department and Internal Revenue Service criminal tax investigation to avoid prosecution. A conviction would have forced him out of his Vista Equity Partners management firm, $65 million fine and a prison sentence.

Robert F Smith
Robert F. Smith (Photo by Michael Loccisano/Getty Images for Robert F. Kennedy Human Rights )

As part of the settlement, he must admit that he failed to pay about $30 million in taxes, with penalties and interest accounting for the expected $140 million payout, per Bloomberg.

Smith’s tax woes began after he allegedly failed to file proper reports of foreign bank and financial accounts, the report states

The businessman and entrepreneur is the wealthiest Black person in America, with a reported net worth of $7 billion.

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The post Billionaire Robert Smith reaches $140 million tax settlement with DOJ appeared first on TheGrio.

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