Austin News

An Austin billionaire who paid off student loans for an entire graduating class at Morehouse College in Atlanta is under investigation for possible tax crimes, Bloomberg News reported.

Robert Smith was the 2019 commencement speaker at Morehouse, and, at the end of speech, he promised to pay off the student loans of the 400 graduates, to the tune of $34 million, prompting cheers.

The graduates didn't know that Smith was under investigation by the U.S. Justice Department and the Internal Revenue service for possible tax crimes, Bloomberg reported, citing four unnamed sources.

At issue is $200 million in offshore assets, the story said. 

No charges have been filed against Smith and the investigation could determine that he doesn't owe taxes on the offshore assets, according to Bloomberg News. He is trying to resolve the matter with a civil settlement and has discussed cooperating with investigators, the story said.

Prosecutors are working on a potentially larger tax case against one of Smith’s associates, Houston businessman Robert T. Brockman, the story states.

Brockman funded the $1 billion private equity firm that Smith launched in 2000, Bloomberg News reported. The business links between Smith and Brockman are complex, involving offshore assets, trusts and foundations, the story said.

Smith declined to comment to Bloomberg News.

He used his own money to pay off the Morehouse College student debt, the story said. He also reportedly donated $20 million to the Smithsonian National Museum of African American History and $54 million to the National Park Foundation to buy the homes of Martin Luther King Jr. and other prominent African Americans. King was a Morehouse College graduate.

Earlier this year Smith helped pay for the funeral of George Floyd, the Black man killed during an arrest in Minneapolis in May, prompting nationwide protests.