Tax cheat Robert F. Smith bought ranch, ski condos, nightclub with hidden money: report
Billionaire Robert F. Smith put his girlfriend up in a Manhattan apartment and bought expensive homes in California, Colorado and France with untaxed income, according to a leaked court document that offers a glimpse the private equity honcho’s illicit spending.
Smith, 59, was ensnared in the largest tax bust in US history in 2020, but escaped charges by agreeing to testify against his business partner, former Reynolds & Reynolds CEO Robert Brockman, who was accused of hiding $2 billion from the IRS. Brockman died earlier this month.
The Vista Equities Chief — who is the richest black man in the country with a net worth of $8 billion, according to Forbes — was hit with $139 million in fines for his admitted tax evasion and filed a flurry of court motions to seal evidence against him in the case.
Despite his efforts to keep details of his spending under wraps, a June affidavit from a Treasury Special Agent connected to the case against Smith and Brockman’s accountant laid out how Smith hid money from Uncle Sam and spent it lavishly, according to The Daily Mail.
The affidavit includes information from a private investigator hired by Smith’s ex-wife Suzanne McFayden amid their bitter divorce.
“Smith had his business pay for, and treat as business-related expenses, the rental of a luxury New York City apartment and living expenses of Smith’s then-girlfriend,” Special Agent Trista Merz reportedly wrote in the 2018 affidavit.
The written statement also listed properties bought by the billionaire using offshore monies 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 of untaxed funds and spent $22 million more renovating it, the British tabloid reported.
The 6,600 square foot riverside home sits on 300 acres and boasts a pool, tennis court and fishing lake, according to the article.
Smith also purchased two ski condos and a restaurant/nightclub called The White Pearl in the French Alps town of Megève for more than $5 million and furnished them using offshore accounts, the affidavit reportedly said.
He allegedly paid rent on them to his own company to try and through tax investigators off his trail, his disgruntled ex reportedly told officials.
Despite claiming the properties as a business expense, McFayden claimed he used them “as a weekend and holiday getaway where their children learned how to ski,” according to the article.
Another $7.5 million in untaxed money went to buy and renovate a “second home” in Sonoma, California, the court document reportedly said.
Smith also allegedly put an unidentified girlfriend up in a Manhattan apartment using a business account in 2013, according to the report. The affidavit does not specify what apartment, but Smith owns multiple homes in the city including a $59 million Chelsea penthouse that he bought in 2018.
In 2020, Smith reportedly also bought two homes in North Palm Beach, Florida for a combined $48 million.
Smith and his accountant Carlos Kepke set up foreign trusts in Nevis, Belize, Bermuda, and the British Virgin Islands, agent Merz reportedly alleged.
“Smith used this structure to conceal from the IRS approximately $150 million of taxable income he earned from various Vista Private Equity Funds,” the affidavit said.
As the government’s prosecution of 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 gone on a charitable gift-giving spree in the years prior to cooperating with the feds, most notably pledging to pay off the $34 million worth of student loans for Morehouse College’s Class of 2019.
He had also ingratiated himself with Trump administration insiders, at one point holding daily calls with former Treasury Secretary Steve Mnuchin, and joining Ivanka Trump’s White House advisory board on jobs, according to the report.
