Billionaire Robert Smith reportedly under criminal tax investigation

Denver-born billionaire and philanthropist Robert F. Smith is under criminal investigation for potential tax crimes, according to reporting by Bloomberg.

In a story published Friday, Bloomberg reporters detailed a U.S. Department of Justice investigation into whether or not Smith paid U.S. taxes on about $200 million in assets moved through financial structures based in the Caribbean. The investigation began in 2016, late in President Barack Obama’s administration, according to Bloomberg.

At issue, according to Bloomberg, is whether Smith was the beneficial owner of the off-shore entities or if the money that flowed through them was earmarked for charity. If the proceeds were always meant to go to charitable causes, it could mean Smith did not owe taxes on that money.

Relying on information provided by four anonymous sources, the story says Smith has not been charged with any crime at this point. He is reportedly talking to officials about resolving the investigation through a civil settlement. Smith also recently talked to prosecutors about cooperating with a larger investigation into associate Robert T. Brockman, a Houston businessman that helped Smith launch his investment firm Vista Equity Partners with $1 billion in backing in 2000, according to the story.

Playing out in courts in Bermuda, the United Kingdom and San Francisco, the case against Brockman could deal with as much as $1.5 billion investigators believe has been illegally hidden from the U.S. government, according to Jan Woloniecki, a Bermudian lawyer working for the Justice Department who was quoted in the Bloomberg story.

Smith and representatives of Vista Equity partners declined to provide comments for the Bloomberg story, as did a spokesman for the Justice Department.

When contacted by The Denver Post on Sunday, Vista Equity Partners did not immediately provide a response.

Smith is a fourth-generation Coloradan who grew up in Denver and attended East High School. He now makes his home in Austin, Texas, but has strong ties to his hometown.

Vista Equity’s investments include several tech companies either headquartered or with a large presence in Denver, including Ping Identity, Marketo and Xactly. Smith is also an investor in the Flyfisher Group, a firm that is involved in several properties and businesses along the Welton Street corridor in Denver’s historically Black Five Points neighborhood. In 2017, Smith delivered the commencement address at the University of Denver’s graduation ceremony. His father earned a doctoral degree from DU.

In the last few years, Smith surpassed Oprah Winfrey to become the wealthiest Black person in America. Forbes’s 2020 list of the world’s billionaires places Smith at No. 330, with a personal net worth of $5 billion. Bloomberg’s article says he’s worth $6 billion.

Smith has been very active in philanthropy, supporting institutions such as the National Museum of African American History & Culture. He has signed fellow billionaire Warren Buffet’s Giving Pledge, according to Bloomberg, vowing to donate most of his wealth to charity.

In May 2019, Smith made headlines by pledging to personally pay for the student loan debt of all 400 members of Morehouse College’s graduating class. Bloomberg reports Smith was also among the donors that paid for the funeral of George Floyd, the Black man who died in May after a Minneapolis police officer knelt on his neck for nearly nine minutes, setting off racial justice protests around the world, including in Denver.

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