Houston Attorney Commits Suicide Before He Was To Stand Trial For Operating $225 Million Tax Evasion Scheme Involving America’s Richest Black Man, Robert Smith
Nov. 29 2022, Published 7:25 p.m. ET
A Houston-based tax attorney committed suicide on the eve of facing court on charges that he helped hide $225 million from the U.S. Internal Revenue Service in a corruption scandal involving Robert Smith, America's richest Black man.
A judge presiding over the case — where Smith, the billionaire founder of private equity Vista Equity Partners, had turned government whistleblower — made the shocking announcement Monday.
Carlos Kepke, 83, was charged with helping Smith conceal the fortune from the IRS.
The lawyer’s unexplained death was announced in a San Francisco courtroom. Earlier today, it was revealed Kepke died from a self-inflicted gunshot wound.
As a result, the criminal case was dismissed without trial.
It's the second death swirling around the case which is believed to be America's biggest tax scam ever.
Robert T. Brockman, 81, died on August 5 of this year — five months before he was to face a trial even though attorneys had argued he had dementia and was incompetent to stand trial. He had pleaded not guilty to a 39-count indictment with evading taxes on $2 billion in gains, wire fraud, money laundering, and other offenses.
“Brockman was involved in the largest ever tax evasion case against an individual in the U.S.,” a source close to the case told RadarOnline.com.
“Robert Smith has now managed to twice avoid getting on a witness stand,” a source close to the case told RadarOnline.com, noting Smith had signed a non-prosecution agreement — a settlement agreement of sorts — made to avoid a criminal trial.
Smith — who is billed as “America's richest Black man” and is worth an estimated $11.9 billion — signed a non-prosecution agreement with the feds on Oct. 9 two years ago.
In the document, the 59-year-old “acknowledged and agreed” with the government’s case that he participated in a tax evasion scheme.
The agreement, obtained exclusively by RadarOnline.com, revealed how Smith participated in the scam.
He used a trust and another entity to “willfully conceal taxable income paid to those entities,” and he “completely and unilaterally controlled said income which he knew was taxable to him” and “affirmatively acted to conceal the income from the Internal Revenue Service.”
Smith also acknowledged failing to report to the IRS his financial interest in foreign bank accounts.
He was expected to be probed by the feds prosecuting Kepke at the aborted trial.
Kepke had been snared in a sting where he bragged to an undercover agent posing as a bar owner about how he placed assets in offshore trusts, notably in the Central American nation of Belize.
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Kepke had pleaded not guilty prior to the trial. He faced charges of conspiracy and aiding in the preparation of false tax returns by Smith, whose private equity fund manages about $96 billion in assets.
Kepke was paid about $1 million by Smith, according to the indictment.
As part of Smith’s non-prosecution agreement, he agreed to pay two separate amounts — $56,278,125 and $82,930,165 — for unpaid federal tax, penalties, and interest to the IRS for a span of 14 years and for failing to report his off-shore cash.
Remarkably, during the scheme, he also tried to claim a tax refund of $182,138,000.
He was forced to abandon the claim as part of the agreement to avoid jail, the documents obtained by RadarOnline.com reveal.
Last year, a report in The Daily Beast claimed Smith — who is worth more than $11 billion — ratted on Brockman and Kepke.
“In Smith’s statement of facts, delivered to prosecutors for the landmark case, he indicated that Brockman, identified in the document as “Individual A,” had introduced him to an attorney, named only as “Individual B”—whom the indictment indicates was Kepke,” the report said.
“The indictment is not a surprise as you know since in the Statement of Facts released last year as part of Robert's Non Prosecution Agreement (NPA), there were two individuals of interest to the DOJ—Bob Brockman (now known to be Individual A), and Carlos Kepke as Brockman's lawyer (now known to be Individual B)—and that Robert's cooperation represented DOJ's best avenue to prosecuting each of those individuals,” a source said.
The Justice Department could not have prosecuted Kepke on the basis of his role as Brockman’s lawyer, a source said, as the statute of limitations has expired.
“Prosecutors may have hoped Kepke would cooperate, like Smith, in their case against Brockman,” it was reported. But he declined to follow Smith from alleged criminal into informant status.
Brockman was the former chief executive of Reynolds and Reynolds Co, an auto dealership software vendor.
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