Black Billionaire Robert F. Smith, Who Vowed To Pay Student Loans, Is Facing Tax Probe
Billionaire Robert F. Smith, who promised to pay the student loans of the entire 2019 Morehouse graduating class, is now facing a tax crime investigation. Federal authorities are said to be examining whether Smith, a tech investor, philanthropist, and CEO of BE 100s private equity firm Vista Equity Partners, owes taxes on $200 million in assets that were moved through offshore entities.
Bloomberg cited four unnamed sources, at least one of who said the Justice Department and IRS agents have been investigating Smith for the past four years. Bloomberg also reported a key factor in the investigation is whether he was the beneficial owner of Caribbean entities, which received proceeds from Vista’s private-equity fund. Some of those proceeds flowed through offshore entities into an American charitable foundation where Smith is the founding director.
Smith has not been charged with a crime at this time and, according to Bloomberg, the investigation might find him not to owe taxes on the assets. However, Bloomberg added the report also said he may be seeking leniency in return for cooperating in multiple investigations.
A possible conviction may lead to a hefty fine and other penalties for the billionaire philanthropist and entrepreneur.
One of the investigations is focused on Robert Brockman, a Houston businessman who gave Smith $1 billion to start a private equity firm using funds that originated from a charitable trust based in Bermuda, and Brockman benefits from.
Smith has given away millions in charitable donations in recent years. In 2016, he gave $50 million to the Cornell Engineering School and $20 million to the Smithsonian National Museum of African American History and Culture.
In 2019, Smith donated $1.5 million to Morehouse most of which went toward creating the Robert Frederick Smith Scholars Program. The remainder was used for the design and creation of a park serving as a new outdoor study area for students.