Austin News

The Austin billionaire who said he would pay off the Morehouse College Class of 2019's student debt won't do time over tax fraud allegations after agreeing to a plea deal earlier this month.

In a non-prosecution agreement reached with the U.S. Department of Justice on Oct. 9, billionaire Robert Smith admitted that for about 15 years he was involved in a scheme that included offshore trusts and bank accounts. Smith admitted he tried to use these trusts and accounts to conceal his income and evade taxes.

Smith, 57, also agreed to cooperate in the DOJ's ongoing investigation, pay $139 million in taxes and penalties and abandon $182 million in charitable contribution deductions.

Austin Billionaire Robert F. Smith | twitter.com/rfs_vista

"It is never too late to do the right thing," U.S. Attorney David Anderson said in a statement released Oct. 15 by the Justice Department. "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, CEO of Vista Equity Partners and Carnegie Hall board chairman, made headlines last year when, toward the end of a speech before about 400 graduating class members at Morehouse in Atlanta, he said he would pay off their student loans.

Smith reportedly did carry through with that promise.

In August 2019, Smith received the 2019 Carnegie Medal of Philanthropy. That same month, an investigation into Smith's finances over possible tax crimes came to light.

Smith apparently already was under investigation when he promised the Morehouse graduates that he would pay off their student loans, about $34 million, Bloomberg News reported at the time.

In his deal with the DOJ, Smith admitted he used third parties to conceal his ownership and control of a trust in Belize and a shell company to avoid paying taxes. Smith also admitted to using accounts in the British Virgin Islands and Switzerland to hide income.

Smith is alleged to have failed to report more than $200 million in income that resulted from the scheme. Smith also admitted that he used a portion of the unreported income to purchase a vacation home in California and properties in France.