Uh Oh, Looks Like We Might Have A Real Life "Scott's Tots" Incident On Our Hands. Vista CEO Billionaire Robert Smith, Who Said He Would Pay Off Morehouse Student Loans Admits To Massive Tax Fraud.
The Hill - Robert Smith, the billionaire who went viral last year for paying off the debt of students at Morehouse College, admitted to an illegal scheme to conceal income and evade taxes by using offshore trusts and bank accounts for 15 years.
The Justice Department announced on Thursday that Smith entered a non-prosecution agreement, in which he admitted his involvement in the scheme and agreed to cooperate with the ongoing investigation. The billionaire will also pay back $139 million in taxes in penalties, and he agreed to abandon $182 million in charitable contribution deductions.
“It is never too late to do the right thing,” U.S. Attorney David Anderson said in a statement. “It is never too late to tell the truth. Smith committed serious crimes, but he also agreed to cooperate. Smith’s agreement to cooperate has put him on a path away from indictment.”
Smith, the CEO of Vista Equity Partners, admitted to using third parties to conceal his beneficial ownership and control of the Excelsior Trust in Belize and Flash Holdings, a shell company. He formed these entities so that he could 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 income earned and distributed to Flash Holdings from private equity funds.
The billionaire, who lives in Austin, Texas, did not report over $200 million of partnership income as a result of the scheme.
Smith further admitted to using $2.5 million of the unreported income to purchase a vacation home in Sonoma, Calif., in 2005. In 2010, he bought two ski properties and a piece of commercial property in France.
Everybody remembers this guy Robert Smith.
Billionaire owner of investment firm Vista Equity Partners.
Made big-time news last year when he announced he was going to pay off Morehouse's graduating class' student loans.
He then went on to actually do so. To the tune of about $40 million.
(sidebar - I've had a blog sitting in drafts since about July that I thought was too hot button to post, but it centers on the absurdity of college tuition, and the "for-profit" college business model in general. Absolutely bonkers that 400 kids graduating in the year 2019 are burdened with $34 million in debt.)
Really really noble stuff.
Something he deserves to be highly commended for.
But...
Turns out he used an offshore business account, now being implicated in his tax evasion, to pay those kids' debts off.
A play right out of Michael Scott's playbook (if the Michael Scott Foundation was sitting on $5 Billion).
But the corruption doesn't stop there.
Smith’s case is connected to another billionaire, Robert Brockman, who on Thursday was charged with hiding $2 billion in income from the IRS. It was the biggest tax fraud case in U.S. history.
Washington Post - Robert T. Brockman was so paranoid that the Internal Revenue Service would catch on to his scheme, prosecutors said, that in June 2016 the Texas billionaire allegedly ordered his offshore money handler to travel the United States destroying paper evidence and “electronic media” with shredders and hammers.
But on Thursday, prosecutors alleged that his decades-long tax fraud scheme, the largest in American history, had finally caught up to him. A federal grand jury in San Francisco indicted Brockman, 79, on 39 charges, including tax fraud, wire fraud, evidence tampering and money laundering, authorities said.
“The allegation of a $2 billion tax fraud is the largest ever tax charge against an individual in the United States,” David L. Anderson, the U.S. attorney for the Northern District of California, said at a news conference.
So this guy is good pals with Robert Smith, and one of his biggest investors.
Turns out Robert was helping him, and probably countless others, to evade taxes via his offshore and shell account expertise.
Now they all got caught. But instead of hard time, Robert Turned on his friends and went states witness. He got slapped on the wrist, made to pay back what he owed, and he gets to go on living the billionaire life married to this chick who definitely didn't marry him for his money. And whom you might remember for breaking up Jason Kidd's marriage. Hope Dworaczyk.
HIt the mother fuckin music-
p.s. - gotta love the 1% and politicians like JB Pritzker preaching that we need to reform the tax code, just so that the middle class can get hammered even more, and they can continue to duck it. These two cases, especially the Robert T. Brockman one, are just two small examples of the upper crust paying millions, to save hundreds of millions (in Brockman's case, $2 Billion) in taxes.
p.p.s. - leave it to 50 Cent to drop in from the clouds and weigh in on the fallout. Didn't take him for a CNBC guy.
p.p.p.s. - (NSFW Link for research purposes only)