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US-FRAUD-BUSINESS-SMITH
US tycoon who pledged millions for Black students admits tax fraud
NEW YORK, Oct 16, 2020 (BSS/AFP) – Billionaire businessman Robert Smith,
who made headlines last year by promising to pay off school loans taken on by
hundreds of Black students, has reached a deal with US authorities to stave
off prosecution for tax fraud.
He will pay $140 million to tax authorities as part of the arrangement, the
Justice Department said in a statement Thursday.
Smith, CEO of the investment firm Vista Equity Partners and the wealthiest
Black American, is accused of hiding revenue from 2000 to 2015 to avoid
paying millions in taxes.
He has admitted doing this with offshore accounts in Belize and St Kitts
and Nevis, in the Caribbean, the department said.
News of Smith’s deal broke the same day prosecutors accused Texas software
tycoon Robert Brockman of hiding $2 billion in income from tax authorities
over two decades, including earnings from Vista.
According to US media reports, Smith cooperated with authorities in
Brockman’s case.
Smith, 57, who is worth more than $5 billion according to Forbes magazine,
drew tears of joy last year when he promised the 400-member graduating class
of historically Black Morehouse College in Atlanta that he would pay off all
of their student loans. This amounted to an estimated $40 million.
In America, such loans tend to average tens of thousands of dollars and are
a huge burden that many young people take years to pay off.
Smith admitted creating offshore entities to avoid paying some taxes in the
US.
He has now agreed to pay $56 million in back taxes and fines on undeclared
earnings, and $82 million for failing to report his offshore accounts.
He is also giving up a $182 million tax credit for charitable donations he
made.
Vista Equity Partners specializes in financing software and other tech
sector startups. Smith founded it in 2000.
BSS/AFP/GMR/0910 hrs