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Billionaire Robert Smith reaches $140 million settlement over federal tax probe

The U.S. Department of Justice building in Washington.


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Robert Smith, the billionaire chief executive of Vista Equity Partners, has reached a $140 million settlement with the Justice Department, ending a yearslong criminal tax probe, according to people familiar with the matter.

As part of the settlement, Smith will enter into a nonprosecution agreement, the people said. He will admit liability for additional taxes owed and not properly filing foreign bank account reports but won’t be prosecuted. He will agree to abide by certain conditions set forth by the government, the people said.

The settlement includes a penalty of $85 million, back taxes of roughly $30 million and about $25 million of interest, one of the people said. It is among the largest known agreements by a U.S. taxpayer to resolve issues involving undeclared offshore accounts.

The settlement is a result of a four-year criminal inquiry by officials in the Justice Department’s Tax Division and the U.S. attorney’s office for the Northern District of California. At issue was whether Smith failed to pay U.S. taxes on more than $200 million in assets from Caribbean entities set up by the sole investor in Vista’s first private-equity fund. These assets ended up flowing into a charitable foundation Smith created.

An expanded version of this report appears on WSJ.com.

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