Robert F. Smith, the billionaire investor who pledged to pay off the student debt of Morehouse College's graduating class last year, has reached a $140 million settlement with the U.S. Justice Department in one of "the largest known agreements by a U.S. taxpayer to resolve issues involving undeclared offshore accounts," the Wall Street Journal reported on Wednesday.
Smith is the co-founder, chairman and CEO of the Austin-based private equity and venture capital firm Vista Equity Partners.
Bloomberg first reported in August that federal authorities had spent four years examining whether Smith failed to pay taxes on about $200 million in assets by moving them through offshore accounts.
The Journal reported that the money in the assets in question ultimately went to the Fund II Foundation, a charity Smith founded in 2014 that has supported scholarships for minority students in STEM fields, research on breast cancer in Black women and the preservation of Martin Luther King Jr.'s birth and family homes.
Under the terms of the settlement, Smith will admit liability for additional taxes owed and not properly filing foreign bank account reports, but he will not be prosecuted, according to the Journal. The $140 million settlement includes an $85 million penalty, $30 million in back taxes and about $25 million in interest.
Smith's profile has increased in the last few years. He married his second wife, former Playmate of the Year Hope Dworacyzk, in 2015 and became the first Black American to sign the Giving Pledge, a campaign founded by Warren Buffett and Bill Gates to get billionaires to pledge at least half of their wealth to philanthropic causes.
In May of 2019, Smith gave the commencement address at Morehouse College, a historically Black men's college in Atlanta, and announced he would pay off the student loans of the roughly 400 graduates.
Smith ranked 330th on Forbes' annual list of the world's billionaires, released in April, with an estimated net worth of $5 billion. He is the wealthiest Black person in the U.S.
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