Vista Equity’s Robert Smith Reportedly Fighting U.S. Tax Probe

 Robert Smith, the founder, chairman and CEO of Vista Equity Partners, is reportedly facing a criminal tax probe from the U.S. Justice Department and the Internal Revenue Service.

Federal authorities are examining whether Smith failed to pay U.S. taxes on about $200 million in assets that moved through offshore structures, Bloomberg reported Friday. The case hinges on whether Smith was the beneficial owner of those Caribbean entities that received proceeds from Vista’s first private-equity fund, the report said. A portion was directed to Smith’s charitable foundation, Fund II Foundation, where he is founding director and president.

Vista declined to comment on the inquiry. The DOJ, the IRS, and Fund II Foundation could not be reached for comment.

Smith has not been charged. A conviction could force him out of Vista, the private equity firm he founded, and send him to prison, Bloomberg reported. The federal inquiry is said to be part of a larger case against Robert T. Brockman, a Houston billionaire who helped provide $1 billion for Smith in 2000 to start Vista, the article said. U.S. authorities are reportedly investigating Brockman for possible tax evasion and money laundering of up to $2 billion. Brockman is chairman and CEO of Reynolds and Reynolds, a company he acquired in 2006 for $2.8 billion.

Reynolds and Reynolds could not immediately be reached for comment.

Smith is one of the most powerful private equity executives. In 2000, he launched Vista Equity with Brian Sheth, co-founder and president. The private equity firm, which invests in software companies, has become one of the more successful buyout shops with more than $58 billion in cumulative capital commitments. Vista, along with Bain Capital, recently sold Vertafore to Roper Technologies (ticker: ROP) for $5.35 billion. The private-equity firms made in the range of three times their money on Vertafore.

In 2014, Smith launched Fund II Foundation, which makes grants to public charities including The Susan G. Komen Breast Cancer Foundation, The United Negro College Fund, and NPower. More recently, Smith gained notice for pledging last year to wipe out $34 million in student-loan debt owed by Morehouse College’s graduating class of 2019.