Robert Smith, the billionaire who went viral last year in paying off student debt at Morehouse College, admits an illegal way to hide income and avoid taxes through the use of offshore trusts and banks account for 15 years.
The Department of Justice announced on Thursday that Smith entered into a non-persecution agreement, where he admitted his involvement in the procedure and agreed to cooperate with the ongoing investigation. The billionaire will also pay $ 139 million in taxes on fines, and he agreed to waive $ 182 million in charitable deductions.
“It is not too late to do the right thing,” United States Attorney David Anderson said in a statement. “It was not too late for everyone to tell the truth. Smith committed a serious crime, but he also agreed to cooperate. Smith’s agreement to cooperate gave him a path away from the charge.”
Smith, the CEO of Vista Equity Partners, admitted to using third parties to hide his lucrative ownership and control of Excelsior Trust in Belize and Flash Holdings, a shell company. He developed these entities so that he could use them to avoid paying taxes.
Smith also admitted that he used Excelsior Trust and Flash Holdings and their foreign accounts in the British Virgin Islands and Switzerland to hide the revenue earned and distributed in Flash Holdings from private equity funds.
The billionaire, who lives in Austin, Texas, did not report more than $ 200 million in partnership revenue as a result of the scheme.
Smith further admitted that he used $ 2.5 million of unreported revenue to purchase a vacation home in Sonoma, Calif., In 2005. In 2010, he purchased two ski properties and a piece of commercial property. belongs to France.
The billionaire also used $ 13 million in unreported money in 2011 and 2012 to make improvements to a Colorado home and to fund charity work.
Smith’s case is linked to another billionaire Robert Brockman, who on Thursday was charged with hiding $ 2 billion in revenue from the IRS. This is the largest case of tax fraud in US history.
Smith previously donated $ 34 million in September 2019 to repay class student loans graduated from Morehouse College and establish a foundation to help students struggling with future loans.