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How Billionaire Robert Smith Avoided Indictment in Multimillion-Dollar Tax Case

142 points by cwwc 6y ago

tiahura 6y ago
So in consideration for a fine and cooperation against a bigger fish, he got a deal in connection with a nonviolent offense. Exciting because of all the extra 0's, but sounds like an everyday occurrence in DA offices across the country.
hikerclimb 6y ago
These people should be in jail but for some reason our system does nothing about it.
sschueller 6y ago
To rich to fail. Disgusting how the wealthy get away with pretty much everything while the poor are robbed of their possessions and freedom. This needs to be fixed ASAP or the US won't be any different than any corrupt banana republic.
- liaukovv 6y ago
  The issue here seems to be that attorney office can decide to not apply laws arbitrarily. Part of checks and balances I guess?
  - tiahura 6y ago
    Prosecutorial discretion is a different than checks and balances. C&B describes the interrelations between branches of government in furtherance of good governance. Only a single branch of government is involved here - the executive. There are at least two related principles behind prosecutorial discretion. One is that the system should be biased against prosecuting people because putting people in jail shouldn't be our goal. Another principle is that law enforcement, from the local cop all the way to the US Attorney General, has to have some discretion in how they do their job - e.g. do we really want cops pulling everyone over who is 1 mph over the speed limit?
  - alistairSH 6y ago
    But they did apply the law. Part of the settlement was an admission of guilt (along with massive fines and turning snitch on at least one business associate). It sounds like everybody wins. IRS gets revenue in the form of fines that exceeded the avoided taxes. AG's office gets a snitch, which should enable them to fry bigger fish. The criminal pays a large fine, gets his name in the paper for bad reasons, but avoids jail. Really, what does jail get us in this case? It's a non-violent crime.
    - liaukovv 6y ago
      Prosecution would be applying the law. They didn't prosecute.
      - alistairSH 6y ago
        The guy admitted he was guilty and agreed to a punishment - what value does prosecution serve at this point?
        liaukovv 6y ago
        Applying the law equally to all has value of it's own.
- dcolkitt 6y ago
  Virtually no one in the US, rich or poor, is criminally prosecuted for tax evasion. Really the only way to be prosecuted for tax evasion is either to commit a whole bunch of other crimes, and have tax evasion thrown on to the indictment. Or be a public anti-tax activist like Wesley Snipes. This isn’t an issue of the rich getting special treatment. It’s an issue of IRS enforcement having highly constrained resources, and preferring to recover penalties, rather than spend resources on expensive criminal cases. Putting people behind bars doesn’t generate revenue, and revenue is literally the IRS’ middle name.
  - liaukovv 6y ago
    Fear is powerful motivator. Rich people fear prison much more than they fear fines.
    - toomuchtodo 6y ago
      “Laws that are only punishable by fines are only laws for poor people.”
      - NovemberWhiskey 6y ago
        Not with a unit-fine approach. There's a case in Switzerland of a driver getting a $300K speeding ticket, for example.
        unnouinceput 6y ago
        So? still applies. That's pocket change for a multi-millionaire. If I drive and break the speed limit having on my right a beautiful Victoria Secret model and paying the $300K ticket is a way to make her wet, guess what I'll do? Remember the scandal a few years back when models from famous fashion houses in Milan and New York were paid a million dollars per night by rich Arab oil magnates? I'd say those 300K are quite cheap in comparison.
        NovemberWhiskey 6y ago
- godelzilla 6y ago
  "Banana republics" are also the poor robbed of their possessions and freedom by the same unjust system on a global level.
peter_d_sherman 6y ago
You know (and I realize that this comment will be highly controversial), you know, it's amazing to me that in this day and age, if someone is rich and/or famous and accused of a crime, it's amazing to me that the media never seems to give them "Due Process"... "Media Due Process" For lack of a better term... It doesn't seem to exist in this day and age. I'd like to hear the other side of the story before I make up my mind, thank you very much! Until I do, from the accused own's mouth, I might add, I'm going to presume innocent until proven guilty. I will not be "the court of public opinion" in response to the media, any media, slighted one way or slighted the other. I simply refuse. I don't know the accused, I don't know what happened, and until all of the facts are on the table -- pro and con -- I refuse to make up my mind on the subject. A single set of facts from a single media outlet, or even several -- are not all of the facts, because they could have been cherry-picked, one way or the other... I take this approach; this mindset; with all media in this day and age -- not just the media outlet that broke this story... OK, those are my thoughts. Go ahead and lambaste me if you disagree...
- ddulaney 6y ago
  If you read the article, you’ll see that he has admitted guilt as a part of the deferred prosecution agreement. The thing that worries me is that he was able to use money to avoid prison. This is an example of a different law for the rich and everyone else — paying a fine (not a big deal for a billionaire) to avoid prison (a very big deal for a billionaire) substantially reduces incentives to actually pay your taxes.
- liaukovv 6y ago
  He admitted committed crimes as part of the agreement.
- 1986 6y ago
  > In a six-page statement of facts, Smith acknowledged evading more than $43 million in taxes over a decade and repeatedly filing false tax forms.
- aioprisan 6y ago
  When you can read the DOJ case filings and all the facts of the case, where he actually agreed that he did in fact commit crimes, there's no need to "hear from the accused's own mouth." You're just making excuses for someone's crimes in the name of some intellectual purity exercise. Do you also believe there were "good people on both sides" in Charlottesville?
modeless 6y ago
My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires. I don't see how this is evidence of special treatment for billionaires. The guy paid way more in penalties than he saved on taxes and also had to help prosecute his friend, who evaded way more tax than he did. It doesn't seem to me like he came out on top.
- pwned1 6y ago
  Yeah, generally criminal prosecution is reserved for the really egregious cases, such as complete failure to file or failure to claim large amounts of income for substantial time periods.
  - ciamac 6y ago
    The claim is that he didn't declare $200M in income and hid it in off-shore accounts over a decade. Sounds like a large amount of money and a substantial time period.
- GizmoSwan 6y ago
  Billionaires can avoid paying taxes equal to what people make in life time. It is fraud. Why should Bernie Madoff gone to jail then?! if some guy can steal a car then? The scale matters.
  - ChrisMarshallNY 6y ago
    Bernie Madoff went to jail because he ripped off very rich people, and, even more importantly, humiliated and betrayed them. I suspect, if the victims of his schemes had just been a bunch of plebes like us, then he would be sunning on the Riviera, right now.
    - missedthecue 6y ago
JumpCrisscross 6y ago
> Barr signed off on a non-prosecution agreement...required Smith to admit he had committed crimes, pay $139 million and cooperate against a close business associate indicted in the largest tax-evasion case in U.S. history—Texas software mogul Robert T. Brockman Prosecutorial discretion is a tricky thing to judge. On one hand, it's a black box. On the other hand, it has to be. It's a human judgement around which investigations are worth pursuing given the facts and circumstances, the law and the will of the polity. Within the confines of the rules, this looks...fine? It sounds like Smith was fined more than he aimed to save. And if it bags a bigger fish, particularly if with jail time, it seems like the trade would be worth it. At the very least it makes tax evasion riskier going forward--your billionaire co-conspirator is now a real liability. Without knowing the odds around that case, it's difficult to judge this decision.
- sgpl 6y ago
  Is it tricky to judge though? I think the reason why such stories get more attention is because they shouldn't be decided inside a black box. This person admitted guilt, he also admitted that at the time he made the deal with Brockman he knew it was sketchy. He only tried to course correct when he knew he was being investigated. If this individual makes a mistake, I can understand the leniency but essentially he made a deal that he knew at the time to be wrong and knowingly kept defrauding the government till he couldn't anymore due to discovery, and essentially came out of it with not so much as a scratch, maybe some stress from all this. And he's continued to whitewash the narrative around this with 'philanthropy'. In my opinion it shouldn't be about him being fined more than he aimed to save. That essentially encourages others to strike similar bargains with other bad actors as the net result is the consequences are relatively small compared to the upside.
- jawns 6y ago
  > It sounds like Smith was fined more than he aimed to save. That might be true in absolute terms, but saving the money at the time likely enabled him to grow his wealth faster, putting him in a better position now, even accounting for repayment, than he otherwise would have been. Companies do this all the time when they take on debt. Having the money now, even if you need to repay it layer, lets you grow fast, and the longer you can put off repayment, the more you can compound your gains.
mattficke 6y ago
This is a systemic problem with tax enforcement in the US in recent years, caused in part by reduced funding for the IRS. Wealthy people can afford expensive legal defenses, which makes it more expensive for the IRS to pursue these cases, so they focus instead on easy to win cases against low income people. >According to data released by the IRS last week, millionaires in 2018 were about 80% less likely to be audited than they were in 2011. Audits of the rich continue to plunge while those of the poor hold steady, and the two audit rates are converging. Last year, the top 1% of taxpayers by income were audited at a rate of 1.56%. EITC recipients, who typically have annual income under $20,000, were audited at 1.41%. [1] [1] https://www.propublica.org/article/irs-now-audits-poor-americans-at-about-the-same-rate-as-the-top-1-percent https://www.propublica.org/article/irs-now-audits-poor-ameri...
- vmception 6y ago
  This has nothing to do with that
  - yardie 6y ago
    Partly, the tax prosecutor had a solid case but in Barr's mind there was a chance of failure. And the incestuous relationship of private and federal lawyers didn't help. Barr's former colleagues were sitting the otherside of the meeting table. Do you think the typical construction contractor or engineer has anything near that? They'd be prosecuted, found guilty, and offered some sort of reduced or delayed sentencing.
    - vmception 6y ago
      IRS budget cuts had nothing to do with an intense decade long focus on Smith and Vista because they actually were investigating. The DOJ has nothing to do with IRS budget cuts. I’m not responding to what you are saying, I am responding to which agencies and budgets are being referred to. There are plenty of other comments in this thread for you to make your particular point on.
thoughtstheseus 6y ago
The national security issue is surprising... I’m curious what it was. Vista is really more of a large tech conglomerate so they’re in lots of business lines.
- hogFeast 6y ago
  That was very surprising. If I buy shares in Lockheed Martin, can I claim "national security" too. It is a very powerful and opaque defence. Companies use it all the time too to avoid anti-trust action (AT&T did so for decades). Using it in the case of a private equity fund manager seems a stretch..
  - thoughtstheseus 6y ago
    Especially when this is a “personal tax matter” and not related to Vista. Strains credibility somewhere.
mistrial9 6y ago
I see this as a cynical mass-media emphasis on an individual tax case, while a multi-national corporate tax-evasion party continues larger than ever. -- As a US citizen with some decades behind me, I can say that the US has lost balance with taxes badly. On the one hand there are "illegal" laborers with no working benefits and little protection, paying who-knows-what for tax; secondly, in the 90s, international money transfer by corporations ran rampant for tax evasion. The Clinton's became super-powers on Wall Street for turning a blind eye to it, and later the Ms. of the family became essentially the official enabler of this with the US State Department Foriegn Aid office ($8 billion a year slush fund, on top of dollar-based commerce tax evasion). Saavy multi-national corporations pay little to no tax here, and it is widely documented. Meanwhile, a 20-something engineer at a six-figure salary can tell you how much of that they get to keep. (hint about half here in California)
- cyberlurker 6y ago
  I often see this “half” income lost to taxes figure on HN and it often doesn’t stand up to scrutiny (at least in the US). Are you including 401k contributions as part of the half not kept?
  - jtms 6y ago
    If you are in NYC and making a livable salary it certainly does stand up to scrutiny.
    - zartar 6y ago
      Yes. Was logging in to share the same comment. When I was an engineer in NYC my taxable income was about the following: 1. ~35% federal 2. ~8% state 3. ~3% city Don't forget sales tax!
      - xhkkffbf 6y ago
        And property tax and gas tax and ....
      - 6y ago
vmception 6y ago
There is a tax compliant way to accomplish everything he did. Its interesting to me that they went after some of those things too: the prosecution agreement required Smith to not claim the deduction on $182 million donated to charity. That’s a crafty way of getting money back. Kind of like a ballast system to provide balance.
- seraphsf 6y ago
  What’s the tax compliant way?
  - vmception 6y ago
    The key issues here were hiding the existence of accounts and organizations, not the existence of them. The British Virgin Islands company can exist and its earnings can grow tax free. The same for the Caymans one. The nature of what those organizations do determines what taxes a US citizen owner has to pay, in many cases it would still be substantially lower than “ordinary income”. The key issues would be aiming to avoid passive foreign investment company and controlled foreign company regulations. The second issue is neglecting the FBAR reporting. Which is another way of telling the US government about bank accounts and companies. Neglecting FBAR alone has criminal penalties. Merely telling them does not create a tax liability. But perhaps telling them would reveal other non-compliance or undermine other asset protection plans by the mere nature of someone knowing. Could trigger pursuits by creditors or prior relationships. Not everyone has these problems and as you see they are not necessarily tax problems. The third issue was using the funds domestically. They bought a house on US soil, strike one, and lived in it, strike two, and not paying taxes on the amount repatriated, strike three. They could have posted collateral with a third party lender and borrowed against it, to get liquid. Paper borrowing without a third party lender (ie. Just writing a contract on behalf of the offshore company you own, and saying you are borrowing) would not be compliant. Collateralized third party lending has stood the test of time. If your collateral gets liquidated you have to pay taxes then, so overcollateralize and pay your interest. A year in the US Virgin Islands or Peurto Rico could have been used to convert those taxable earnings into post-tax at 0-4% tax rate. They just didn't and stuck with non-compliant avenues. They are using non-profits onshore, they could have done a lot more with that to reduce their taxable earnings while retaining control of the funds for the most part. There are so many ways.
vmception 6y ago
This is very fascinating! He tried amending his tax returns to correct the reporting issues. He tried to use amnesty program on undeclared Swiss banking back in the early 2010s when the US was piercing the Swiss Constitution, and was denied! And this all started because divorce proceedings listed many assets. Eventually ensnaring a completely unrelated person in actual jail. Wow. For all intents and purposes it seems like they were overly focused on Smith, until some of the hobnobbing with the administration started to pay off.
fireeyed 6y ago
If you are middle class and you don't pay taxes or hide your income, IRS will come down with the full force of the law. Prosecution for the serfs Non-prosecution agreements for the Club. "Its a big club and you ain't in it" - George Carlin
- harryh 6y ago
  Your assertion is not correct. The IRS is surprisingly reasonable about things. There are penalties and interest for failing to pay your taxes correctly, but they are also willing to cut deals to make things work. Criminal prosecution is rare and reserved for the egregious and uncooperative. It's something like 2,000 cases per year total.
vmception 6y ago
Although there was a tax compliant way to accomplish everything they did, still without paying more to the US, The divorce started all this. Divorce laws are far too simplistic and rely on the concept of a “unit” with both spouses being equal partners by mere nature of showing up. This seems to be a stretch of the imagination with a reality having diminishing returns. For example, even with a spouse providing some form of unpaid labor, the level of utility in how that helps the other spouse is not unlimited, it would be closer to (O)logn. It should have a specific value that is quantifiable. This does not seem to be part of discussions and in most places seems to be the most egregious thing one could suggest! In any other form of financial partnership, this is easy to quantify or at least there is greater flexibility in setting it up. One example - which I am not suggesting is applicable to marriage - is how vesting agreements really help give the (O)logn compensation path. I have seen some divorce laws that seem holistic, specifically Monaco’s. Which provides a limitation on alimony as well. For people that actually own assets outright (not mortgages but the whole asset) There is also fairly easy estate planning possibly even in “community property” states to separate assets from before a marriage. So thats another wealthy privilege. Fixing all of that would fix what would even be attempted to be listed in a divorce court proceeding.
- davemp 6y ago
  This is a pretty interesting take on divorce. I'd be hesitant to view marriage as a financial partnership though. To me, marriage is more of a life partnership where both parties are "all in". A lot of the benefits of having a "life partner" stem from having someone who unconditionally watches your back and keeps your needs in mind. You can't put a price on that type of a partnership by definition (you introduce a monetary condition). I agree that someone with real wealth could hire folks to manage their assets, administrate, listen to their thoughts/concerns, provide intimacy, etc, at the cost of a fraction of their net worth well below 50%. Maybe people worried about protecting their wealth should just hire out those roles instead of getting married. I wonder why they don't. :)
  - vmception 6y ago
    > Maybe people worried about protecting their wealth should just hire out those roles instead of getting married. I wonder why they don't. :) A lot of people do. What point were you trying to make by assuming its not happening a lot?
dukeofdoom 6y ago
China hangs its fallen oligarchs. Here you just buy off politicians and threaten media with lawsuits if they don't tow the line. Literally a reporter walked off set this week, because a guest strayed too far into lawsuit territory. And a voting machine company sued a politician for a Billion Dollars for disparaging its black box results. All in the last month. While I support everyone having their date in court. I think its safe to say that in the last year, millions of people both left and right have woken up to how politicized and crooked the justice system is.
- RHSeeger 6y ago
  > And a voting machine company sued a politician for a Billion Dollars for disparaging its black box results. That's one way to phrase it. Another would be that a highly visible, influential politician used that influence to attempt to destroy a multi-billion dollar company; specifically by using what may well be lies and slander, presenting it as truth.
  - dukeofdoom 6y ago
    May or many not be, until we have discovery and actual third party audit. If corporations can decide which politicians to platform, count the votes, and can sue into bankruptcy politicians that question the results, than clearly power rests with the corporations and the oligarchs. Politicians are just for show. As a cynical citizen, I'm going to assume that if it wasn't possible to adjust the vote totals, their machines wouldn't have been picked. Responsibility for transparency is on them. Full third party audit, random vote sample statical analysis, and so on. Would be much more preferable to instil confidence in their corporation than suing a disgruntled politician.
sgpl 6y ago
I replied to another comment with this story which has now been downvoted to oblivion, but I'd highly recommend another article on the topic from the washington post[1], it has a far better narrative (in my opinion). At the start of his career as a private equity investor, he got one of those offers he couldn't refuse, a billion dollar investment from a single source that came with some strings. When the strings came undone in the form of govt. investigation into the tax obfuscation, he tried to fix it by applying for a IRS program which was rejected. He then went 0 -> 100% on headline making philanthropy. Essentially he made a deal with the devil and came out of it without a scratch, relatively speaking. Perhaps came out ahead would be a better way of phrasing that. Obviously none of this takes away from the work/drive that went into making Vista successful, but it's still an interesting story of how he got his start. > Brockman’s offer set Smith up with his own private equity firm, Vista Equity Partners, and more than $1 billion in capital to invest, according to Smith’s statement to prosecutors. That arrangement eventually allowed Smith to become a billionaire himself. Both aspects stem from a deal Smith and Brockman made 20 years ago, one that joined the unlikely pair in a venture with vast ambitions. Smith, the determined son of Denver schoolteachers, was then an aspiring financier; Brockman was older and far wealthier, a man who had already made a fortune with a company that sold software for the automotive industry. These two sides of Smith — the impressive generosity on one and the admitted tax evasion on the other — may be hard to reconcile. But they are inextricable, according to documents reviewed by The Washington Post, including charity filings with tax authorities and Justice Department court filings. Smith applied for the IRS program in March 2014 but was quickly rejected. This is typically a sign the agency already is scrutinizing the applicant’s tax filings, former federal prosecutors said. It is about this time that Smith became a major philanthropist, frequently making headlines with his generosity. [1] https://www.washingtonpost.com/business/2020/11/09/smith-brockman-tax-evasion/ https://www.washingtonpost.com/business/2020/11/09/smith-bro...
koiz 6y ago
Ah corruption out in the open. What else is new.
steve76 6y ago
There's such a thing as bad charities. This one just paid himself. But there are charities that are fronts for horrible evil behavior, turning a good dead into a fraudulent evil act. If you are going to police them, you're going to get the profiteering crooks too. Didn't know where he was at, as in most people go to these places to die, in a good way. Better to be poor.
f430 6y ago
I don't get it. If you want the same privileges that Billionaires have then you should work on becoming a billionaire not complaining because nothing will change. It doesn't make sense for Billionaires to be taxed as it would lead to poor capital distribution in the economy. I'm all for philanthropy but there is also no law that says Billionaires should give just because they are a Billionaire.
- hellotomyrars 6y ago
  Right. It's so easy to work to become a billionaire and it's not like most of them are born into generational wealth (They didn't have to work for it). It turns out maybe we can work to make change while not also becoming billionaires. Most people don't need to be billionaires. But everybody needs Food/Housing/Healthcare. `There is no law`. Well, there are laws. And they do require them to be taxed. And historically their taxes were much higher. But Reagan sold the Trickle Down economics story to the nation, and now they pay dramatically less.
  - f430 6y ago
    55.8% are self-made. Sure, many come from already middle to upper class which gives them room to fail. Still, a good chunk of them started with nothing. Nobody thinks its easy to become a billionaire but they shouldn't be treated like everybody else. The wealth they command is wll beyond what most private citizens have at their disposal. We are also missing out the mid to high 9-digit millionaires who also should be exempt from the asinine taxation policy that is meant to enforce serfdom. The law is not for the hyper rich ($600MM in assets), they operate under a completely different law that our system is designed to protect. This is good for efficient capital trickle down effect. We simply cannot be putting ceilings on incentives. It needs to be unlimited and it won't even register in the global economy. Just because you can't tax billionaires don't mean citizens and the government is getting stiffed. This is exactly what the poor man thinks they think that because they are poor everybody else should be poor and taxed too. Or did you think USSR had a good trickle down effect? Venezuela? France?
    - 6y ago
drummer 6y ago
Imagine getting punished by a robber for trying to evade getting robbed by him. That is basically what happens with "tax evasion". And the IRS are the robbers.
ApolloFortyNine 6y ago
How much in taxes do you have to cheat as a middle class tax payer to be investigated and tried in your mind? In my experience (misreported some accounts due to a misunderstanding, which had a ~25% impact on what taxes I paid) the IRS sends you what you owe with a nominal penalty. I believe I paid ~5% extra. I paid it, and life went on. I think there's a huge misunderstanding around the IRS "going after the little guy." For you to actually be convicted of tax fraud, the IRS would have to take you to court (expensive) and prove you set out commit fraud (hard to do in most cases). At the point where this is worth it for the IRS to do, are you really 'the little guy' any more?
1290cc 6y ago
Imagine being a billionaire and then avoiding taxes. No matter how you look at it you are always going to remain in the tres commas club and afford a fleet of yachts, mansions, rare Nike Jordans and throw parties for instagram models in Tulum. Yet you still do it.
- bradlys 6y ago
  I assume there’s a risk reward calculation being made where all they care about are their yearly returns. I know a guy who is quite rich off of Bitcoin (bought thousands when it was $2 and has held most of it). Refuses to pay taxes unless the IRS actually comes after him. So maybe these billionaires are similar. They’ll only pay if the IRS makes them and they’ll drag their feet in whatever way they can.
  - unnouinceput 6y ago
    What taxes to pay in the first place off to? If he didn't sold them bitcoins he didn't make any money. Are you saying you should prosecute for taxes people who hold Picasso paintings because this year Picasso went up 10 times more than previous year, even if they don't sell it? Remember, bitcoin is art, not money. Or is the same money just like art is.
    - bradlys 6y ago
      He's cashed some out. "and has held most of it"
      - unnouinceput 6y ago
        "some" is the key word here. If he cashed "some" only to buy himself a house, I am pretty sure he doesn't need to pay taxes on that, except maybe the notarial taxes inherent to the transaction itself.
glitchc 6y ago
I feel this article is gas-lighting the audience. Buried midway through the article is the important tidbit that as part of the DPA, Smith has agreed to pay $139 million USD. And, over the years, he has given away more money to charity than owed in taxes, making him very sympathetic to a jury. Ergo there’s no chance of prosecution, he’s given more than he owes to charity, and has still agreed to pay back most of what he owes. It’s not perfect, but the system is working.
- ciamac 6y ago
  Notice that his charitable giving began after he was aware the IRS was after him. There is evidence he committed criminal tax fraud, giving the money back or giving the money to charity doesn't ameliorate that. To make an analogy, suppose you robbed a bank and were about to get caught. If you gave back the money, and made some donations to charity, would that absolve you of criminal liability? This seems like an accurate analogy to me, with the "bank" being the US taxpayer in this case. Here's another article that highlights how he became a major, high profile philanthropist only after it became clear the feds were on his case: https://www.washingtonpost.com/business/2020/11/09/smith-brockman-tax-evasion/ https://www.washingtonpost.com/business/2020/11/09/smith-bro... The charitable giving seems to clearly be part of an aggressive, multi-pronged, and ultimately successful strategy to avoid prosecution. This is not evidence "the system is working", this is evidence that you can buy your way out of trouble.
- deleted 6y ago
  [deleted]
- legulere 6y ago
  > And, over the years, he has given away more money to charity than owed in taxes, making him very sympathetic to a jury. It should be the voters‘ decision where the money goes to. Charities can also be a place to store money. If you control them you can also decide where the money is invested in. You just need to put a bit each year into some charitable cause where again you can spend that money buying products from wherever you want.
chrisgd 6y ago
Given propublica’s investigation into higher audit rates among the poor than the wealthy, I view this as a win. Keep moving in this direction and chase higher payouts with longer periods of nothing rather than volume

142 points by cwwc 6y ago

So in consideration for a fine and cooperation against a bigger fish, he got a deal in connection with a nonviolent offense. Exciting because of all the extra 0's, but sounds like an everyday occurrence in DA offices across the country.

hikerclimb 6y ago

These people should be in jail but for some reason our system does nothing about it.

sschueller 6y ago

To rich to fail. Disgusting how the wealthy get away with pretty much everything while the poor are robbed of their possessions and freedom. This needs to be fixed ASAP or the US won't be any different than any corrupt banana republic.

liaukovv 6y ago
The issue here seems to be that attorney office can decide to not apply laws arbitrarily. Part of checks and balances I guess?
- tiahura 6y ago
  Prosecutorial discretion is a different than checks and balances. C&B describes the interrelations between branches of government in furtherance of good governance. Only a single branch of government is involved here - the executive. There are at least two related principles behind prosecutorial discretion. One is that the system should be biased against prosecuting people because putting people in jail shouldn't be our goal. Another principle is that law enforcement, from the local cop all the way to the US Attorney General, has to have some discretion in how they do their job - e.g. do we really want cops pulling everyone over who is 1 mph over the speed limit?
- alistairSH 6y ago
  But they did apply the law. Part of the settlement was an admission of guilt (along with massive fines and turning snitch on at least one business associate). It sounds like everybody wins. IRS gets revenue in the form of fines that exceeded the avoided taxes. AG's office gets a snitch, which should enable them to fry bigger fish. The criminal pays a large fine, gets his name in the paper for bad reasons, but avoids jail. Really, what does jail get us in this case? It's a non-violent crime.
  - liaukovv 6y ago
    Prosecution would be applying the law. They didn't prosecute.
    - alistairSH 6y ago
      The guy admitted he was guilty and agreed to a punishment - what value does prosecution serve at this point?
      - liaukovv 6y ago
        Applying the law equally to all has value of it's own.
dcolkitt 6y ago
Virtually no one in the US, rich or poor, is criminally prosecuted for tax evasion. Really the only way to be prosecuted for tax evasion is either to commit a whole bunch of other crimes, and have tax evasion thrown on to the indictment. Or be a public anti-tax activist like Wesley Snipes. This isn’t an issue of the rich getting special treatment. It’s an issue of IRS enforcement having highly constrained resources, and preferring to recover penalties, rather than spend resources on expensive criminal cases. Putting people behind bars doesn’t generate revenue, and revenue is literally the IRS’ middle name.
- liaukovv 6y ago
  Fear is powerful motivator. Rich people fear prison much more than they fear fines.
  - toomuchtodo 6y ago
    “Laws that are only punishable by fines are only laws for poor people.”
    - NovemberWhiskey 6y ago
      Not with a unit-fine approach. There's a case in Switzerland of a driver getting a $300K speeding ticket, for example.
      - unnouinceput 6y ago
        So? still applies. That's pocket change for a multi-millionaire. If I drive and break the speed limit having on my right a beautiful Victoria Secret model and paying the $300K ticket is a way to make her wet, guess what I'll do? Remember the scandal a few years back when models from famous fashion houses in Milan and New York were paid a million dollars per night by rich Arab oil magnates? I'd say those 300K are quite cheap in comparison.
        NovemberWhiskey 6y ago
godelzilla 6y ago
"Banana republics" are also the poor robbed of their possessions and freedom by the same unjust system on a global level.

peter_d_sherman 6y ago

You know (and I realize that this comment will be highly controversial), you know, it's amazing to me that in this day and age, if someone is rich and/or famous and accused of a crime, it's amazing to me that the media never seems to give them "Due Process"... "Media Due Process" For lack of a better term... It doesn't seem to exist in this day and age. I'd like to hear the other side of the story before I make up my mind, thank you very much! Until I do, from the accused own's mouth, I might add, I'm going to presume innocent until proven guilty. I will not be "the court of public opinion" in response to the media, any media, slighted one way or slighted the other. I simply refuse. I don't know the accused, I don't know what happened, and until all of the facts are on the table -- pro and con -- I refuse to make up my mind on the subject. A single set of facts from a single media outlet, or even several -- are not all of the facts, because they could have been cherry-picked, one way or the other... I take this approach; this mindset; with all media in this day and age -- not just the media outlet that broke this story... OK, those are my thoughts. Go ahead and lambaste me if you disagree...

ddulaney 6y ago
If you read the article, you’ll see that he has admitted guilt as a part of the deferred prosecution agreement. The thing that worries me is that he was able to use money to avoid prison. This is an example of a different law for the rich and everyone else — paying a fine (not a big deal for a billionaire) to avoid prison (a very big deal for a billionaire) substantially reduces incentives to actually pay your taxes.
liaukovv 6y ago
He admitted committed crimes as part of the agreement.
1986 6y ago
> In a six-page statement of facts, Smith acknowledged evading more than $43 million in taxes over a decade and repeatedly filing false tax forms.
aioprisan 6y ago
When you can read the DOJ case filings and all the facts of the case, where he actually agreed that he did in fact commit crimes, there's no need to "hear from the accused's own mouth." You're just making excuses for someone's crimes in the name of some intellectual purity exercise. Do you also believe there were "good people on both sides" in Charlottesville?

modeless 6y ago

My understanding is that if a little guy evades taxes, but then cooperates with the IRS when caught, and agrees to pay all taxes and interest and penalties, then they generally don't get thrown in jail and have all their other money and possessions and responsibilities taken away, as this article seems to imply they should do with billionaires. I don't see how this is evidence of special treatment for billionaires. The guy paid way more in penalties than he saved on taxes and also had to help prosecute his friend, who evaded way more tax than he did. It doesn't seem to me like he came out on top.

pwned1 6y ago
Yeah, generally criminal prosecution is reserved for the really egregious cases, such as complete failure to file or failure to claim large amounts of income for substantial time periods.
- ciamac 6y ago
  The claim is that he didn't declare $200M in income and hid it in off-shore accounts over a decade. Sounds like a large amount of money and a substantial time period.
GizmoSwan 6y ago
Billionaires can avoid paying taxes equal to what people make in life time. It is fraud. Why should Bernie Madoff gone to jail then?! if some guy can steal a car then? The scale matters.
- ChrisMarshallNY 6y ago
  Bernie Madoff went to jail because he ripped off very rich people, and, even more importantly, humiliated and betrayed them. I suspect, if the victims of his schemes had just been a bunch of plebes like us, then he would be sunning on the Riviera, right now.
  - missedthecue 6y ago

JumpCrisscross 6y ago

> Barr signed off on a non-prosecution agreement...required Smith to admit he had committed crimes, pay $139 million and cooperate against a close business associate indicted in the largest tax-evasion case in U.S. history—Texas software mogul Robert T. Brockman Prosecutorial discretion is a tricky thing to judge. On one hand, it's a black box. On the other hand, it has to be. It's a human judgement around which investigations are worth pursuing given the facts and circumstances, the law and the will of the polity. Within the confines of the rules, this looks...fine? It sounds like Smith was fined more than he aimed to save. And if it bags a bigger fish, particularly if with jail time, it seems like the trade would be worth it. At the very least it makes tax evasion riskier going forward--your billionaire co-conspirator is now a real liability. Without knowing the odds around that case, it's difficult to judge this decision.

sgpl 6y ago
Is it tricky to judge though? I think the reason why such stories get more attention is because they shouldn't be decided inside a black box. This person admitted guilt, he also admitted that at the time he made the deal with Brockman he knew it was sketchy. He only tried to course correct when he knew he was being investigated. If this individual makes a mistake, I can understand the leniency but essentially he made a deal that he knew at the time to be wrong and knowingly kept defrauding the government till he couldn't anymore due to discovery, and essentially came out of it with not so much as a scratch, maybe some stress from all this. And he's continued to whitewash the narrative around this with 'philanthropy'. In my opinion it shouldn't be about him being fined more than he aimed to save. That essentially encourages others to strike similar bargains with other bad actors as the net result is the consequences are relatively small compared to the upside.
jawns 6y ago
> It sounds like Smith was fined more than he aimed to save. That might be true in absolute terms, but saving the money at the time likely enabled him to grow his wealth faster, putting him in a better position now, even accounting for repayment, than he otherwise would have been. Companies do this all the time when they take on debt. Having the money now, even if you need to repay it layer, lets you grow fast, and the longer you can put off repayment, the more you can compound your gains.

mattficke 6y ago

This is a systemic problem with tax enforcement in the US in recent years, caused in part by reduced funding for the IRS. Wealthy people can afford expensive legal defenses, which makes it more expensive for the IRS to pursue these cases, so they focus instead on easy to win cases against low income people. >According to data released by the IRS last week, millionaires in 2018 were about 80% less likely to be audited than they were in 2011. Audits of the rich continue to plunge while those of the poor hold steady, and the two audit rates are converging. Last year, the top 1% of taxpayers by income were audited at a rate of 1.56%. EITC recipients, who typically have annual income under $20,000, were audited at 1.41%. [1] [1] https://www.propublica.org/article/irs-now-audits-poor-americans-at-about-the-same-rate-as-the-top-1-percent https://www.propublica.org/article/irs-now-audits-poor-ameri...

vmception 6y ago
This has nothing to do with that
- yardie 6y ago
  Partly, the tax prosecutor had a solid case but in Barr's mind there was a chance of failure. And the incestuous relationship of private and federal lawyers didn't help. Barr's former colleagues were sitting the otherside of the meeting table. Do you think the typical construction contractor or engineer has anything near that? They'd be prosecuted, found guilty, and offered some sort of reduced or delayed sentencing.
  - vmception 6y ago
    IRS budget cuts had nothing to do with an intense decade long focus on Smith and Vista because they actually were investigating. The DOJ has nothing to do with IRS budget cuts. I’m not responding to what you are saying, I am responding to which agencies and budgets are being referred to. There are plenty of other comments in this thread for you to make your particular point on.

thoughtstheseus 6y ago

The national security issue is surprising... I’m curious what it was. Vista is really more of a large tech conglomerate so they’re in lots of business lines.

hogFeast 6y ago
That was very surprising. If I buy shares in Lockheed Martin, can I claim "national security" too. It is a very powerful and opaque defence. Companies use it all the time too to avoid anti-trust action (AT&T did so for decades). Using it in the case of a private equity fund manager seems a stretch..
- thoughtstheseus 6y ago
  Especially when this is a “personal tax matter” and not related to Vista. Strains credibility somewhere.

mistrial9 6y ago

I see this as a cynical mass-media emphasis on an individual tax case, while a multi-national corporate tax-evasion party continues larger than ever. -- As a US citizen with some decades behind me, I can say that the US has lost balance with taxes badly. On the one hand there are "illegal" laborers with no working benefits and little protection, paying who-knows-what for tax; secondly, in the 90s, international money transfer by corporations ran rampant for tax evasion. The Clinton's became super-powers on Wall Street for turning a blind eye to it, and later the Ms. of the family became essentially the official enabler of this with the US State Department Foriegn Aid office ($8 billion a year slush fund, on top of dollar-based commerce tax evasion). Saavy multi-national corporations pay little to no tax here, and it is widely documented. Meanwhile, a 20-something engineer at a six-figure salary can tell you how much of that they get to keep. (hint about half here in California)

cyberlurker 6y ago
I often see this “half” income lost to taxes figure on HN and it often doesn’t stand up to scrutiny (at least in the US). Are you including 401k contributions as part of the half not kept?
- jtms 6y ago
  If you are in NYC and making a livable salary it certainly does stand up to scrutiny.
  - zartar 6y ago
    Yes. Was logging in to share the same comment. When I was an engineer in NYC my taxable income was about the following: 1. ~35% federal 2. ~8% state 3. ~3% city Don't forget sales tax!
    - xhkkffbf 6y ago
      And property tax and gas tax and ....
    - 6y ago

vmception 6y ago

There is a tax compliant way to accomplish everything he did. Its interesting to me that they went after some of those things too: the prosecution agreement required Smith to not claim the deduction on $182 million donated to charity. That’s a crafty way of getting money back. Kind of like a ballast system to provide balance.

seraphsf 6y ago
What’s the tax compliant way?
- vmception 6y ago
  The key issues here were hiding the existence of accounts and organizations, not the existence of them. The British Virgin Islands company can exist and its earnings can grow tax free. The same for the Caymans one. The nature of what those organizations do determines what taxes a US citizen owner has to pay, in many cases it would still be substantially lower than “ordinary income”. The key issues would be aiming to avoid passive foreign investment company and controlled foreign company regulations. The second issue is neglecting the FBAR reporting. Which is another way of telling the US government about bank accounts and companies. Neglecting FBAR alone has criminal penalties. Merely telling them does not create a tax liability. But perhaps telling them would reveal other non-compliance or undermine other asset protection plans by the mere nature of someone knowing. Could trigger pursuits by creditors or prior relationships. Not everyone has these problems and as you see they are not necessarily tax problems. The third issue was using the funds domestically. They bought a house on US soil, strike one, and lived in it, strike two, and not paying taxes on the amount repatriated, strike three. They could have posted collateral with a third party lender and borrowed against it, to get liquid. Paper borrowing without a third party lender (ie. Just writing a contract on behalf of the offshore company you own, and saying you are borrowing) would not be compliant. Collateralized third party lending has stood the test of time. If your collateral gets liquidated you have to pay taxes then, so overcollateralize and pay your interest. A year in the US Virgin Islands or Peurto Rico could have been used to convert those taxable earnings into post-tax at 0-4% tax rate. They just didn't and stuck with non-compliant avenues. They are using non-profits onshore, they could have done a lot more with that to reduce their taxable earnings while retaining control of the funds for the most part. There are so many ways.

vmception 6y ago

This is very fascinating! He tried amending his tax returns to correct the reporting issues. He tried to use amnesty program on undeclared Swiss banking back in the early 2010s when the US was piercing the Swiss Constitution, and was denied! And this all started because divorce proceedings listed many assets. Eventually ensnaring a completely unrelated person in actual jail. Wow. For all intents and purposes it seems like they were overly focused on Smith, until some of the hobnobbing with the administration started to pay off.

fireeyed 6y ago

If you are middle class and you don't pay taxes or hide your income, IRS will come down with the full force of the law. Prosecution for the serfs Non-prosecution agreements for the Club. "Its a big club and you ain't in it" - George Carlin

harryh 6y ago
Your assertion is not correct. The IRS is surprisingly reasonable about things. There are penalties and interest for failing to pay your taxes correctly, but they are also willing to cut deals to make things work. Criminal prosecution is rare and reserved for the egregious and uncooperative. It's something like 2,000 cases per year total.

vmception 6y ago

Although there was a tax compliant way to accomplish everything they did, still without paying more to the US, The divorce started all this. Divorce laws are far too simplistic and rely on the concept of a “unit” with both spouses being equal partners by mere nature of showing up. This seems to be a stretch of the imagination with a reality having diminishing returns. For example, even with a spouse providing some form of unpaid labor, the level of utility in how that helps the other spouse is not unlimited, it would be closer to (O)logn. It should have a specific value that is quantifiable. This does not seem to be part of discussions and in most places seems to be the most egregious thing one could suggest! In any other form of financial partnership, this is easy to quantify or at least there is greater flexibility in setting it up. One example - which I am not suggesting is applicable to marriage - is how vesting agreements really help give the (O)logn compensation path. I have seen some divorce laws that seem holistic, specifically Monaco’s. Which provides a limitation on alimony as well. For people that actually own assets outright (not mortgages but the whole asset) There is also fairly easy estate planning possibly even in “community property” states to separate assets from before a marriage. So thats another wealthy privilege. Fixing all of that would fix what would even be attempted to be listed in a divorce court proceeding.

davemp 6y ago
This is a pretty interesting take on divorce. I'd be hesitant to view marriage as a financial partnership though. To me, marriage is more of a life partnership where both parties are "all in". A lot of the benefits of having a "life partner" stem from having someone who unconditionally watches your back and keeps your needs in mind. You can't put a price on that type of a partnership by definition (you introduce a monetary condition). I agree that someone with real wealth could hire folks to manage their assets, administrate, listen to their thoughts/concerns, provide intimacy, etc, at the cost of a fraction of their net worth well below 50%. Maybe people worried about protecting their wealth should just hire out those roles instead of getting married. I wonder why they don't. :)
- vmception 6y ago
  > Maybe people worried about protecting their wealth should just hire out those roles instead of getting married. I wonder why they don't. :) A lot of people do. What point were you trying to make by assuming its not happening a lot?

dukeofdoom 6y ago

China hangs its fallen oligarchs. Here you just buy off politicians and threaten media with lawsuits if they don't tow the line. Literally a reporter walked off set this week, because a guest strayed too far into lawsuit territory. And a voting machine company sued a politician for a Billion Dollars for disparaging its black box results. All in the last month. While I support everyone having their date in court. I think its safe to say that in the last year, millions of people both left and right have woken up to how politicized and crooked the justice system is.

RHSeeger 6y ago
> And a voting machine company sued a politician for a Billion Dollars for disparaging its black box results. That's one way to phrase it. Another would be that a highly visible, influential politician used that influence to attempt to destroy a multi-billion dollar company; specifically by using what may well be lies and slander, presenting it as truth.
- dukeofdoom 6y ago
  May or many not be, until we have discovery and actual third party audit. If corporations can decide which politicians to platform, count the votes, and can sue into bankruptcy politicians that question the results, than clearly power rests with the corporations and the oligarchs. Politicians are just for show. As a cynical citizen, I'm going to assume that if it wasn't possible to adjust the vote totals, their machines wouldn't have been picked. Responsibility for transparency is on them. Full third party audit, random vote sample statical analysis, and so on. Would be much more preferable to instil confidence in their corporation than suing a disgruntled politician.

sgpl 6y ago

I replied to another comment with this story which has now been downvoted to oblivion, but I'd highly recommend another article on the topic from the washington post[1], it has a far better narrative (in my opinion). At the start of his career as a private equity investor, he got one of those offers he couldn't refuse, a billion dollar investment from a single source that came with some strings. When the strings came undone in the form of govt. investigation into the tax obfuscation, he tried to fix it by applying for a IRS program which was rejected. He then went 0 -> 100% on headline making philanthropy. Essentially he made a deal with the devil and came out of it without a scratch, relatively speaking. Perhaps came out ahead would be a better way of phrasing that. Obviously none of this takes away from the work/drive that went into making Vista successful, but it's still an interesting story of how he got his start. > Brockman’s offer set Smith up with his own private equity firm, Vista Equity Partners, and more than $1 billion in capital to invest, according to Smith’s statement to prosecutors. That arrangement eventually allowed Smith to become a billionaire himself. Both aspects stem from a deal Smith and Brockman made 20 years ago, one that joined the unlikely pair in a venture with vast ambitions. Smith, the determined son of Denver schoolteachers, was then an aspiring financier; Brockman was older and far wealthier, a man who had already made a fortune with a company that sold software for the automotive industry. These two sides of Smith — the impressive generosity on one and the admitted tax evasion on the other — may be hard to reconcile. But they are inextricable, according to documents reviewed by The Washington Post, including charity filings with tax authorities and Justice Department court filings. Smith applied for the IRS program in March 2014 but was quickly rejected. This is typically a sign the agency already is scrutinizing the applicant’s tax filings, former federal prosecutors said. It is about this time that Smith became a major philanthropist, frequently making headlines with his generosity. [1] https://www.washingtonpost.com/business/2020/11/09/smith-brockman-tax-evasion/ https://www.washingtonpost.com/business/2020/11/09/smith-bro...

koiz 6y ago

Ah corruption out in the open. What else is new.

steve76 6y ago

There's such a thing as bad charities. This one just paid himself. But there are charities that are fronts for horrible evil behavior, turning a good dead into a fraudulent evil act. If you are going to police them, you're going to get the profiteering crooks too. Didn't know where he was at, as in most people go to these places to die, in a good way. Better to be poor.

f430 6y ago

I don't get it. If you want the same privileges that Billionaires have then you should work on becoming a billionaire not complaining because nothing will change. It doesn't make sense for Billionaires to be taxed as it would lead to poor capital distribution in the economy. I'm all for philanthropy but there is also no law that says Billionaires should give just because they are a Billionaire.

hellotomyrars 6y ago
Right. It's so easy to work to become a billionaire and it's not like most of them are born into generational wealth (They didn't have to work for it). It turns out maybe we can work to make change while not also becoming billionaires. Most people don't need to be billionaires. But everybody needs Food/Housing/Healthcare. `There is no law`. Well, there are laws. And they do require them to be taxed. And historically their taxes were much higher. But Reagan sold the Trickle Down economics story to the nation, and now they pay dramatically less.
- f430 6y ago
  55.8% are self-made. Sure, many come from already middle to upper class which gives them room to fail. Still, a good chunk of them started with nothing. Nobody thinks its easy to become a billionaire but they shouldn't be treated like everybody else. The wealth they command is wll beyond what most private citizens have at their disposal. We are also missing out the mid to high 9-digit millionaires who also should be exempt from the asinine taxation policy that is meant to enforce serfdom. The law is not for the hyper rich ($600MM in assets), they operate under a completely different law that our system is designed to protect. This is good for efficient capital trickle down effect. We simply cannot be putting ceilings on incentives. It needs to be unlimited and it won't even register in the global economy. Just because you can't tax billionaires don't mean citizens and the government is getting stiffed. This is exactly what the poor man thinks they think that because they are poor everybody else should be poor and taxed too. Or did you think USSR had a good trickle down effect? Venezuela? France?
  - 6y ago

drummer 6y ago

Imagine getting punished by a robber for trying to evade getting robbed by him. That is basically what happens with "tax evasion". And the IRS are the robbers.

ApolloFortyNine 6y ago

How much in taxes do you have to cheat as a middle class tax payer to be investigated and tried in your mind? In my experience (misreported some accounts due to a misunderstanding, which had a ~25% impact on what taxes I paid) the IRS sends you what you owe with a nominal penalty. I believe I paid ~5% extra. I paid it, and life went on. I think there's a huge misunderstanding around the IRS "going after the little guy." For you to actually be convicted of tax fraud, the IRS would have to take you to court (expensive) and prove you set out commit fraud (hard to do in most cases). At the point where this is worth it for the IRS to do, are you really 'the little guy' any more?

1290cc 6y ago

Imagine being a billionaire and then avoiding taxes. No matter how you look at it you are always going to remain in the tres commas club and afford a fleet of yachts, mansions, rare Nike Jordans and throw parties for instagram models in Tulum. Yet you still do it.

bradlys 6y ago
I assume there’s a risk reward calculation being made where all they care about are their yearly returns. I know a guy who is quite rich off of Bitcoin (bought thousands when it was $2 and has held most of it). Refuses to pay taxes unless the IRS actually comes after him. So maybe these billionaires are similar. They’ll only pay if the IRS makes them and they’ll drag their feet in whatever way they can.
- unnouinceput 6y ago
  What taxes to pay in the first place off to? If he didn't sold them bitcoins he didn't make any money. Are you saying you should prosecute for taxes people who hold Picasso paintings because this year Picasso went up 10 times more than previous year, even if they don't sell it? Remember, bitcoin is art, not money. Or is the same money just like art is.
  - bradlys 6y ago
    He's cashed some out. "and has held most of it"
    - unnouinceput 6y ago
      "some" is the key word here. If he cashed "some" only to buy himself a house, I am pretty sure he doesn't need to pay taxes on that, except maybe the notarial taxes inherent to the transaction itself.

glitchc 6y ago

I feel this article is gas-lighting the audience. Buried midway through the article is the important tidbit that as part of the DPA, Smith has agreed to pay $139 million USD. And, over the years, he has given away more money to charity than owed in taxes, making him very sympathetic to a jury. Ergo there’s no chance of prosecution, he’s given more than he owes to charity, and has still agreed to pay back most of what he owes. It’s not perfect, but the system is working.

ciamac 6y ago
Notice that his charitable giving began after he was aware the IRS was after him. There is evidence he committed criminal tax fraud, giving the money back or giving the money to charity doesn't ameliorate that. To make an analogy, suppose you robbed a bank and were about to get caught. If you gave back the money, and made some donations to charity, would that absolve you of criminal liability? This seems like an accurate analogy to me, with the "bank" being the US taxpayer in this case. Here's another article that highlights how he became a major, high profile philanthropist only after it became clear the feds were on his case: https://www.washingtonpost.com/business/2020/11/09/smith-brockman-tax-evasion/ https://www.washingtonpost.com/business/2020/11/09/smith-bro... The charitable giving seems to clearly be part of an aggressive, multi-pronged, and ultimately successful strategy to avoid prosecution. This is not evidence "the system is working", this is evidence that you can buy your way out of trouble.
deleted 6y ago
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legulere 6y ago
> And, over the years, he has given away more money to charity than owed in taxes, making him very sympathetic to a jury. It should be the voters‘ decision where the money goes to. Charities can also be a place to store money. If you control them you can also decide where the money is invested in. You just need to put a bit each year into some charitable cause where again you can spend that money buying products from wherever you want.

chrisgd 6y ago

Given propublica’s investigation into higher audit rates among the poor than the wealthy, I view this as a win. Keep moving in this direction and chase higher payouts with longer periods of nothing rather than volume