Robert F. Smith, the richest African American in the United States, has quietly made a series of motions for the court to close evidence in the epic tax evasion case in which he was a cooperating witness — and insiders are scratching their heads.
The head of Vista Equity Partners — whose net worth is estimated at $6.7 billion by Forbes, and who recently made headlines with a failed bid to buy the Denver Broncos — escaped criminal charges over alleged tax evasion in October 2020 by brokering a non-prosecution deal certifying against Robert Brockman. Former CEO of Reynolds & Reynolds.
Brockman, an early investment guru for Smith and lead investor for Vista’s massive tech takeover fund, was charged with more than $2 billion in 2020 in alleged fraud — the largest tax evasion case in U.S. history.
The 59-year-old Smith — who is also the chairman of Carnegie Hall and who is best known for spending $34 million to pay off student debt for the entire graduating class at Morehouse College for 2019 — brokered the immunity deal with the feds in 2020. At the time, he also agreed to repay All taxes and penalties are part of the deal. But those terms only apply to crimes Smith has admitted to committing under the deal, sources told The Post.
In the new wave of legal filings made on July 11 in the southern region of the US state of Texas, it is unclear exactly what Smith wants to keep from the public eye, and legal experts warn that it could be as simple as keeping Vista’s finances private, or private to him. However, experts also note that such requests are not made daily in federal tax cases.
“It’s very unusual…I certainly haven’t seen anything like this during my time working on these cases,” Victor Song, who served as the head of criminal investigations at the IRS and now runs the forensic accounting firm Integratas 3, told The Post.
Smith’s representatives declined to comment.
In addition to the case against Brockman in which Smith agreed to testify, there are two active lawsuits that are potential sources of sensitive information about Smith. Initially, Smith was resisting the government, but this issue has not yet moved.
The second — the IRS suit against Carlos Kipke, a Houston-based attorney who prosecutors say worked closely with both Smith and Brockman on tax evasion — could reveal new contacts between Smith and his then-lawyer Kipke about tax evasion. As recently as 2015, Smith paid Kepke $1 million in tax assistance, according to a lawsuit reviewed by The Post.
In March, the Wall Street Journal reported an IRS court filing revealing that Smith’s role in Brockman’s alleged fraud was greater than previously known — specifically, that he helped Brockman transfer $635 million from the United States to offshore accounts. Both Smith transferred the money to one of his offshore accounts, on behalf of Brockman, and signed the deal.
At the time, Smith’s attorney said he relied on the claims of the other parties involved as well as the law firm’s opinion that the transaction was not taxable, and noted that the government did not claim that he had engaged in wrongdoing in connection with the business process.
Earlier this month, Bloomberg reported in court documents that Smith set up the Belize Trust using a false affidavit allegedly signed by his first wife’s uncle, Susan McFayden Smith — details that emerged as part of the lawsuit against Kipke.
Meanwhile, Smith’s personal attorney, Emily Hughes, not only asked to sit in court proceedings against Brockman, but the two attorneys who had struck an objection deal with the government on Smith’s behalf also requested that the proceedings be monitored.
“He wants his team on the ground if he doesn’t hit the fan,” someone close to the situation told On The Money.
In recent months, Smith has reportedly struggled to raise money for a new technology fund in Vista — with some insiders suggesting that pension funds have rules preventing investing with individuals who have been involved in tax fraud.
As The Post previously reported, the Oregon Public Employees Retirement System, which invested $500 million with Smith in 2019, is now investing just $250 million in Vista’s new flagship fund, the files show.