Robert F. Smith has built his reputation as one of America’s most generous philanthropists, pledging to wipe out student debt for entire graduating classes and investing hundreds of millions in educational initiatives for Black communities. But in late 2019, the Vista Equity Partners founder found himself in a peculiar living arrangement: renting a luxurious Palm Beach, Florida, mansion from Donald Trump while federal investigators were pursuing him in what would become one of the largest tax evasion cases in U.S. history.
Under Investigation
The billionaire private equity mogul had secured the $65,000-per-month property at 1125 South Ocean Boulevard, positioned directly next door to Mar-a-Lago.
Smith, who was simultaneously cooperating with federal authorities while concealing more than $200 million from the government through an elaborate offshore scheme, found himself living in the shadow of the president’s Winter White House from fall 2019 to the following March during one of the most precarious periods of his life, according to Forbes.
The rental arrangement came about through necessity rather than design, his reps say.
The family needed immediate accommodations before their children started school in fall 2019, after a previous rental fell through due to black mold issues.
“The Smiths quickly rented a short-term property that Robert did not visit in advance, and no one knew it was an investment property of Eric Trump,” his spokesperson explained, though the property actually belonged to Donald Trump himself.
While Smith, who is worth an estimated $10.8 billion, grappled with federal scrutiny, he was simultaneously building influential relationships within the Trump administration.
His May 2019 pledge to eliminate student debt for Morehouse College’s graduating class had sparked a friendship with Ivanka Trump. The two spoke weekly throughout the pandemic about social initiatives, while Smith maintained regular contact with Treasury Secretary Steven Mnuchin as they worked to direct COVID relief funds toward underserved communities.
Smith’s troubles had been brewing long before his Palm Beach residency.
Criminal investigators first became interested in him around 2013, following tips from whistle-blowers, including a Vista finance officer and a divorce investigator hired by Smith’s first wife. His legal troubles originated from a sophisticated offshore structure established in 2000 with Houston tax lawyer Carlos Kepke. Together, they created entities in Belize and Nevis designed to shield Smith’s private equity income from taxation, channeling more than $200 million through these vehicles.
The scheme began crumbling in 2013 when his Swiss bank informed him of its participation in the U.S. Department of Justice’s reporting program. By 2016, a grand jury was investigating Smith, and his application to enter the IRS’s Offshore Voluntary Disclosure Program was rejected.
Adding an almost comedic element, Smith’s wife Hope contacted Palm Beach police in September 2020 to report a missing 3.63-carat diamond ring worth $1.1 million from their Trump rental. The jewelry had disappeared sometime between January and February 2020, just as the federal investigation reached its climax.
Smith’s political donations, according to Open Secrets, show consistent Democratic support, emphasizing racial equity. He backed Barack Obama, contributed to Kamala Harris since 2016, supported Hillary Clinton’s 2016 bid against Trump, and regularly donated to the Democratic National Committee.
While Smith made early contributions to Mitt Romney’s 2012 campaign and donated to Republican Tim Scott, notably absent are any contributions to Trump’s campaigns, although this does not rule out any “dark money” support. This makes Clinton the only candidate financially supported by Smith to directly challenge Trump in a presidential election .
The investigation concluded in October 2020 when Smith signed a non-prosecution agreement, admitting to tax evasion while agreeing to pay $139 million in penalties. His cooperation proved instrumental in pursuing his business partner Robert Brockman, who faced charges related to concealing $2 billion in taxes. Brockman died before trial, ensuring neither billionaire served prison time.
Smith’s response demonstrated continued dedication to educational philanthropy and racial equity. He established the Student Freedom Initiative, providing more than $100 million in support to over 500 students at historically Black colleges and universities.
His philanthropic portfolio includes programs connecting diverse students to paid STEM internships and mobile health services in Harlem.
