Robert Smith, the billionaire who went viral last year for paying off debt to students at Morehouse College, has declared it an illegal scheme to evade income and evade taxes by using offshore trusts and bank accounts for 15 years.
Ministry of Justice announced on Thursday that Smith entered a non-punishment agreement, in which he acknowledged his participation in the scheme and agreed to cooperate in the ongoing investigation. The billionaire will also return $ 139 million in taxes, and he has agreed to give up $ 1
“It’s never too late to do the right thing,” said U.S. lawyer David Anderson in a statement. “It’s never too late to tell the truth. Smith committed serious crimes, but also agreed to cooperate. Smith’s agreement to cooperate diverted him from the indictment. “
Smith, CEO of Vista Equity Partners, admitted that he used third parties to disguise his own property and control the Excelsior Trust in Belize and Flash Holdings, a shell company. He forms these entities so that he can 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 the income earned and distributed to Flash Holdings by equity funds.
The billionaire, who lives in Austin, Texas, does not report more than $ 200 million in partnership revenue as a result of the scheme.
Smith also admitted that he used $ 2.5 million of unreported income to buy a vacation home in Sonoma, California, in 2005. In 2010, he bought two ski properties and part of a commercial property in France.
The billionaire also used $ 13 million of unaccounted money in 2011 and 2012 to make improvements to a Colorado residence and fund charitable activities on the property.
Smith’s case is related to another billionaire, Robert Brockman, who on Thursday was accused of concealing $ 2 billion in revenue from the IRS. It was the biggest tax fraud case in US history.
Smith previously donated $ 34 million in September 2019 to repay student loans from the then graduating class of Morehouse College and to establish a foundation to support students struggling with future loans.