Billionaire tax cheat’s lavish spending revealed
Billionaire Robert F. Smith moved his girlfriend into a Manhattan apartment and bought expensive homes in California, Colorado and France with untaxed income, according to a leaked court document that gives insight into the honcho’s illicit spending investment capital.
Smith, 59, was caught in the biggest tax bust in US history in 2020 but escaped charges by agreeing to testify against his business partner, the former CEO of Reynolds & Reynolds, Robert Brockman, who was accused of hiding $2 billion from the IRS. Brockman died earlier this month.
The head of Vista Equities – who is the richest black man in the country with a net worth of $8 billion, according to Forbes – was hit with a $139 million fine for his admitted tax evasion and filed a flurry of court petitions to seal the evidence against him in the case.
Despite his efforts to keep the details of his expenses secret, a June affidavit from a Treasury special agent linked to the case against Smith and Brockman’s accountant explained how Smith hid money from Uncle Sam. and spent it lavishly, according to The Daily Mail.
The affidavit includes information from a private detective hired by Smith’s ex-wife, Suzanne McFayden, in the midst of their bitter divorce.
“Smith had and treated as his business expenses the rental of a luxury apartment in New York and the living expenses of Smith’s girlfriend at the time,” Special Agent Trista Merz reportedly wrote in the 2018 affidavit.
The written statement also listed properties purchased by the billionaire using offshore funds hidden from the government, according to the outlet.
Smith bought the Boulder River Ranch in Black Hawk, Colorado in parcels between 2009 and 2013 using $12 million in untaxed funds and spent an additional $22 million to renovate it, the British tabloid reported.
The 6,600-square-foot riverfront home sits on 300 acres and features a pool, tennis court and fishing lake, according to the article.
Smith also bought two ski condos and a restaurant/nightclub called The White Pearl in the town of Megeve in the French Alps for more than $5 million and furnished them using offshore accounts, according to the affidavit.
He allegedly paid rent to his own business to try and get off his trail with tax investigators, his disgruntled ex reportedly told authorities.
Although he claimed the properties as a business expense, McFayden claimed he used them “as a weekend and vacation getaway where their children learned to ski,” according to the article.
An additional untaxed $7.5 million was used to purchase and renovate a “second home” in Sonoma, Calif., according to the court document.
Smith also allegedly hosted an unidentified girlfriend in a Manhattan apartment using a business account in 2013, according to the report. The affidavit does not specify which apartment, but Smith owns several homes in the city, including a $59 million penthouse in Chelsea that he purchased in 2018.
In 2020, Smith also reportedly purchased two homes in North Palm Beach, Florida, for a total of $48 million.
Smith and his accountant Carlos Kepke set up foreign trusts in Nevis, Belize, Bermuda and the British Virgin Islands, Agent Merz allegedly claimed.
“Smith used this structure to conceal from the IRS approximately $150 million in taxable income he earned from various Vista private equity funds,” the affidavit states.
While the government’s lawsuit against Kepke continued, it was unclear what Brockman’s death would mean for the future of the IRS tax case against him, according to the article.
Smith had been on a spree of charitable giveaways in the years leading up to his cooperation with the federal government, including pledging to repay the $34 million in student loans for the class of 2019 at Morehouse College.
He had also indulged himself with Trump administration insiders, at one point holding daily calls with former Treasury Secretary Steve Mnuchin and joining Ivanka Trump’s advisory board on White House jobs. , according to the report.