Robert Smith, the billionaire co-founder of private equity firm Vista Equity Partners, is under federal investigation on questions over tax compliance involving $200 million in assets moved through offshore entities, according to Bloomberg
Investigators are probing whether Smith was the beneficial owner of Caribbean entities that received proceeds from his firm’s first buyout fund. Some of those funds eventually made their way to a US charitable organization founded by Smith, Bloomberg reported.
The billionaire has reportedly been pushing to reach a civil settlement with prosecutors rather than face conviction and possible jail time. He may have even discussed cooperating with a separate tax probe of his former associate, Robert T. Brockman. Prosecutors have yet to formally file any charges against Smith or determine whether he owes money, according to Bloomberg.
Smith has become one of the most visible philanthropists in the US over the past few years as his net worth skyrocketed to more than $5 billion, according to the latest Forbes estimate. In 2019, he pledged to pay off the student debt of graduating seniors at Morehouse College, which was estimated to cost some $40 million.
Big Number
$5.2 billion. That’s how much Smith is currently worth, according to Forbes.
Key Background
Smith is the founder of Vista Equity Partners, a private equity firm that specializes in software and technology companies. Smith founded the firm in 2000 after a stint at Goldman Sachs, where he first worked in the mergers-and-acquisitions department and eventually came to lead enterprise systems and storage, according to a 2018 Forbes profile.
Tangent
Smith has supported Black causes extensively in his philanthropic efforts. Through Fund II Foundation, Smith has directed money towards conserving African American experiences and culture and protecting the environment. When Smith signed the Giving Pledge in 2017, becoming the first Black tycoon to do so, he committed to devoting half of his net worth to causes which support “equality of opportunity for African Americans” and ecological protection.
Surprising Fact
Bloomberg notes that if federal prosecutors ultimately decide to charge Smith or Brockman, their cases could surpass one of the most notable billionaire tax evasion cases of the decade. Ty Warner, owner of Beanie Babies maker Ty Inc., escaped serving jail time after pleading guilty in 2013 to evading at least $5.6 million in U.S. taxes via a secret account in Switzerland.
Source: Forbes
